Central Bank fines Bank of Montreal Ireland €1.24m in second reprimand

Canadian-owned lender failed to submit three important reports to supervisors

The fine comes five years after the Central Bank imposed a €650,000 monetary penalty on Bank of Montreal Ireland for various regulatory breaches.

The Central Bank has fined Bank of Montreal Ireland €1.24 million for failing to submit three important reports to supervisors, marking the second time the regulator has imposed a monetary penalty on the Canadian-owned lender.

Bank of Montreal Ireland failed to establish and maintain effective processes and control to make sure that operational risk returns were filed and the Dublin-based company was also over-reliant on its parent’s group policies, the Central Bank found in an investigation.

"All firms operating in Ireland must do so in line with their regulatory licence, and all conditions attaching to it,"said Seana Cunningham, director of enforcement and anti-money laundering. "Compliance with licence conditions is not optional, and breaches are treated seriously by the Central Bank."

The fine comes five years after the Central Bank imposed a €650,000 monetary penalty on Bank of Montreal Ireland for various regulatory breaches. The regulator said that the previous enforcement action against the company “was an aggravating factor in this case”.


However, the Canadian-owned lender’s disclosure of all relevant information and its willingness to cooperate at all times in advance of and during the investigation served as a mitigating factor, it said.

In October 2015, Bank of Montreal told the Central Bank that it had failed to submit three operational risk reports which were due at the end of 2014, March 2015 and June 2015. This was in reach of a condition of the firm’s licence and was identified through an internal audit of the company’s operational risk management function.

A Central Bank investigation found that the bank did not have the correct processes and controls in place to ensure that the filings were made. The lender had an “inadequate informal process” of email diary reminders to alert the relevant employees of when a reporting submission was due. However, they were time limited and the final reminder was set for November 2014, the Central Bank said.

“This is concerning in circumstances where the firm had been previously informed in 2013 by the Central Bank that its regulatory reporting of operational risk was not to the required standard,” it said.

The Central Bank determined that €1.78 million would be an appropriate fine for the breaches, but this was reduced by 30 per cent to €1.24 million in accordance with a so-called settlement discount scheme under the regulator’s sanctions procedure.

All told, the Central Bank has imposed over €70 million in fines to financial institutions since 2006.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times