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The European Central Bank is preparing to withdraw the operating licence for Banque Havilland, the Luxembourg-based lender owned by Prince Andrew’s longtime financial adviser David Rowland and his family.
The bank has been informed of the ECB’s draft decision, said two people familiar with the matter.
Banque Havilland has been mired in controversy in recent years and faced multiple regulatory probes.
ECB officials believe that under the ownership of the Rowland family — best known in Britain for patriarch David’s former role as Conservative party treasurer and his close personal links to the Duke of York, who borrowed millions from the bank — Banque Havilland has had repeated compliance and anti-money laundering failures.
The ECB declined to comment. Banque Havilland did not respond to a request for comment. David Rowland could not be reached for comment.
Rowland made his fortune in the 1970s and 1980s in daring and often complicated financial investments in shipping, natural resources and property.
The draft decision is not yet final as it must be approved by the ECB’s board of governors, although the process is usually regarded as a formality and is expected to take place quickly.
Once the decision is taken, the bank’s home supervisory authority, Luxembourg’s Commission de Surveillance du Secteur Financier, will formally announce the decision to revoke the licence, ending the bank’s ability to operate in Europe.
CSSF said it does not comment on specific cases.
The Luxembourg bank is Havilland’s central operation. The future of its branches in Dubai, Switzerland, Liechtenstein and Monaco, which are outside the ECB’s regulatory jurisdiction and may be able to continue operating under their own local licences, remains unclear.
Regulators in Switzerland and Liechtenstein have imposed a restriction of new clients being taken on by Havilland as a result of the pending ECB decision.
Finma, the Swiss regulator, said: “[We are monitoring] ongoing compliance with the relevant legal standards by the Zurich branch of Banque Havilland, Liechtenstein, and all other banks licensed in Switzerland and their branches.”
Banque Havilland’s British arm was shut down last year after the Financial Conduct Authority imposed fines of £10mn against the lender and £353,000 against its branch chief executive, David Rowland’s son Edmund, for putting together an investment scheme at the behest of Saudi and Emirati clients that was designed to crash Qatar’s currency, according to an internal bank presentation quoted by the regulator in its enforcement notice. The bank has challenged the FCA’s decision.
The head of the bank’s Monaco branch is meanwhile on trial for alleged money-laundering violations. Prosecutors accuse him of accepting huge cash deposits from clients and failing to raise compliance concerns about their origins or the clients’ identities, allegations that he denies.
Revoking a bank’s licence is the ultimate power of the ECB, which can take such decisions on its own initiative or at the request of a national authority. The last time it did so was to withdraw the licence of Baltic International Bank in Latvia at the request of the local supervisor in March 2023.
Previously an arm of Icelandic bank Kaupthing, which collapsed in the 2008 financial crisis, the Luxembourg bank was bought by the Rowland family in 2009 and renamed after Havilland Hall, the stately home owned by David on the tax haven of Guernsey.
The Duke of York attended the celebrations to inaugurate the new bank in 2009 and played a key role in securing the opening of its Monaco branch by lobbying Monaco’s hereditary ruler Prince Albert to secure a local licence for Havilland, the Daily Mail revealed in 2021.
David Rowland in 2017 personally paid off a £1.5mn loan the bank had made to the duke, who was under financial pressure at the time, according to media reports.
At least seven of David’s eight children are employed or have previously been employed by the bank.
According to its 2023 financial statements, the bank has assets of just over €1.35bn and a €463mn loan book. It has enjoyed particularly strong growth in Liechtenstein, where at least €200mn of new money from wealthy clients was taken on in 2022.
Asked by the Liechtensteiner Volksblatt newspaper in 2022 about the impact on the bank of EU sanctions on Russia, group chief executive Marc Arand complained public opinion often “confused the issue” of sanctions compliance and said “all financial market participants come into contact with Russia in one way or another”.