KPMG facing £4m fine over Co-op Bank

THE accounting watchdog is gearing up to fine KPMG millions of pounds for its work supervising the Co-operative Bank’s accounts.

The Financial Reporting Council (FRC) has indicated it will impose a fine of around £4m on the auditor in the next few weeks, according to reports.

An industry source told the Mail there were ‘a few more hoops’ the FRC would have to jump through before the fine was finalised and the long-running probe brought to a close, but that it was ‘not likely anything will change’.

The FRC opened an investigation in 2014 into KPMG’s ‘preparation, approval and audit’ of the Co-op Bank’s accounts up to 2012, shortly before a £1.5bn capital shortfall was found in its books.

In 2013, KPMG advised the Co-op Bank on an aborted purchase of more than 600 Lloyds Banking Group branches. It audited the Coop Bank’s books for 30 years before the probe, but the FRC has never publicly said how far back its investigation went. The fine relates only to the work that KPMG undertook for the Co-op Bank in 2009, Sky News reported.

KPMG has come under fire for its auditing outsourcer Carillion, which went bust in January 2018.

The FRC and KPMG both declined to comment.