Lloyds Banking Group, which is made up of Lloyds Bank, Halifax, and Bank of Scotland, is being slapped with a hefty fine from regulators after breaching Government sanctions on processing Russian payments.
The Office of Financial Sanctions Implementation (OFSI) has imposed a £160,000 penalty on Bank of Scotland after the lender processed transactions that contravened UK sanctions targeting Russia.
Treasury officials determined that the bank handled 24 separate payments connected to a personal current account belonging to a British national who appears on the Government's sanctions list.
These transactions, which occurred between February 8 and February 23, 2023, amounted to £77,383 in total.
Lloyds Banking Group has been slapped with a £160,000 fine after breaching sanctions
|GETTY
Britain has joined other nations in implementing sanctions against various sectors, companies, and individuals suspected of supporting Russia's military campaign in Ukraine.
Those designated under OFSI regulations for breaching financial sanctions typically face asset freezes and investment restrictions by the state.
The designated individual managed to evade the bank's automated sanctions checks by opening an account at Halifax, which operates under Bank of Scotland, on February 6, 2023.
Their UK passport displayed a name with character alterations and omitted their middle name, creating sufficient difference from the sanctions list entry to avoid triggering an alert.
Mr Putin previously said that the President had 'serious plans regarding Greenland' | REUTERSAs a result, the bank account under the high street financial institution operated without restrictions for more than two weeks.
The sanctioned customer was only identified on February 24, 2023, through a separate screening process designed to detect politically exposed persons, at which point the breaches came to light.
The financial penalty was halved from its original amount after Bank of Scotland came forward voluntarily to report the breaches approximately one month following the transactions.
A spokeswoman for Lloyds Banking Group stated that the company "takes its regulatory responsibilities extremely seriously" despite breaking sanctions.
Lloyds Banking Group is under fire
| PA"We acted swiftly and transparently, proactively referring this one-off, isolated matter to OFSI and working closely with them throughout," the group said.
The bank noted that OFSI acknowledged its prompt voluntary disclosure, which secured the maximum possible reduction in the fine.
Lloyds Banking Group added that it has since enhanced its controls to maintain the highest standards of risk management and governance.
On top of sanctions, investors have warned that the ongoing Russia-Ukraine war continue be an issue monitored by the market going into 2026.
Russia bombs US factory in Ukraine in one of war's largest aerial attacks | REUTERSDavid Morrison, a senior market analyst at Trade Nation, shared: "Traders are also watching developments in Russia, where ongoing Ukrainian attacks on energy infrastructure and potential new US sanctions add another layer of complexity.
"Safe-haven demand remains strong as investors digest US intervention in Venezuela, escalating tensions across Iran, the Russia-Ukraine war, China-Japan frictions, and renewed rhetoric around Greenland.
"Concerns over Federal Reserve independence have also dragged the dollar away from recent highs, supporting flows into non-yielding assets.
"Still, upside momentum may be tempered by Friday’s jobs data, which reduced expectations for aggressive Fed easing in 2026. With US inflation data due tomorrow and Wednesday, some traders appear hesitant to chase gold prices higher from current levels."