Reported by Siddharth Venkataramakrishnan and Michael O’Dwyer

EY agreed to terminate a consulting contract and refund millions of pounds to Santander’s UK business after failings in its anti-financial crime work for the bank, according to three people with knowledge of the matter.

The Big Four consultancy was one of several external advisers called on by Santander as it attempted to address financial crime and anti-money laundering systems that had drawn scrutiny from regulators, according to two of the people. 

The quality of work performed by EY was so poor that the professional services giant was forced this year to offer the bank a refund of about £15mn for the project, the people said. 

The work, codenamed Project Morgan, “went badly wrong over an extended period” and the financial settlement dented the results of the consultancy’s UK financial services division for its most recent financial year ended in June, said one of the people. 

It is not clear whether the work has been brought in-house by Santander or handed to another firm. 

The amount refunded to Santander is equivalent to the annual pay of about 19 of EY’s UK partners, who were each paid an average of £803,000 in the 12 months to June 2022, the most recent year for which it has published financial results. 

The project’s failure has been followed by the prospect of cutbacks in EY’s UK financial crime advisory team.

Read full report: https://www.ft.com/content/7e0ce6a7-d83c-4864-af69-a7044790824e