As a result of the likely forthcoming ‘Brexit’ from the European Union, Triodos Bank are to change the structure of their UK banking operations.
We know that a lot of our clients hold deposits with Triodos Bank, so we just wanted to bring this to your attention.
Currently, Triodos Bank operate in the UK under a ‘passporting’ regime made possible by EU agreements. Under this passporting arrangement, their banking license has been issued and supervised by the Dutch Central Bank (De Nederlandsche Bank) and only subject to limited regulation by the UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
If (or when) the UK prepares to leaves the EU, this passporting arrangement will no longer cover Triodos UK banking activities. Therefore, it is proposed that Triodos Bank NV will create a new subsidiary company, Triodos Bank UK Ltd, wholly owned by Triodos Bank NV. This is the way that most foreign owned banks operate in the UK. It is expected that the new bank will be operational from 1 March 2019
Triodos are confident that this will not impact adversely on their customers. It is expected that all existing accounts will be transferred and adopted by the new Triodos Bank UK Ltd, and there will be no need for ‘re-papering’ (i.e. reissue of documents).
However, there will be one material change for customers and that is in relation to financial protection. Currently, personal customers and eligible organisations are currently protected by the Dutch Deposit Guarantee Scheme (DGS). The DGS guarantees deposits up to a maximum of EUR 100,000 per customer.
Under the new subsidiary arrangement, deposit protection will come from the UK’s Financial Services Compensation Scheme (FSCS) instead. The FSCS (www.fscs.org.uk) is the UK's compensation fund of last resort providing most customers, including private individuals and small businesses, with assurance that up to £85,000 (per customer) of money deposited will be protected if the bank becomes unable to repay money deposited with it. On current exchange rates, 100,000 euro are worth £88,865, so there is a slight loss in protection for UK customers.
The process for transfer to the new Triodos Bank UK Ltd are still in process and going through English court system. The intention is that assuming all stages are passed, that the new business will be operational with effect from 1st March 2019.
This post is for information only and no further action is required. Triodos will be contacting customers directly but for more information, see there dedicated web pages www.triodos.co.uk/legaltransfer