Copy of getty-images-00-TrWi6TS0-unsplash_edited.jpg

Case Study
Pepper Money

Leading a successful banking licence application with the PRA

Company Overview:

Pepper Money is a leading non-bank lender in the UK mortgage market. In pursuit of growth and long-term resilience, Pepper embarked on an ambitious journey to evolve into a fully regulated bank. This required navigating increased regulatory oversight, while simultaneously integrating a material acquisition - significantly increasing the complexity of financial planning.

Our Partner
Laurence Morey, CEO, Pepper Money.

The Challenge

Pepper needed to secure Prudential Regulation Authority (PRA) authorisation while undergoing a business acquisition. The challenge included:

Limited historical data due to the early-stage nature of the business.
Transitioning from a capital markets funding model to a deposit-funded banking model.
Integrating an acquired business, adding new products into scope.
Demonstrating resilience across five entities and multiple product lines under PRA scrutiny.

Our Approach

TriFidus was engaged to design a comprehensive financial model to support the PRA application and executive board decision-making. We:

Modelled five core mortgage products (Owner-Occupied, Buy-to-Let, Second Charge, Bridging, and Commercial Real Estate), each with multiple sub-products.
Developed a standalone, scenario-ready model to stress-test the full portfolio under regulatory standards.
Co-ordinated across subject matter experts to ensure correct regulatory capital and liquidity calculations.
Scoped and executed stress tests for ICAAP and ILAAP, embedding them into the model.
Worked with auditors and Pepper Money’s finance team to validate calculations and outputs.
Produced board-ready outputs to support executive approval of the final business case.

The Outcome

The model became central to Pepper Money’s PRA submission, providing a credible, transparent view of financial resilience. It:

Demonstrated viability as a regulated bank.
Enabled the executive committee to test capital and liquidity strategies with confidence.
Provided regulators with assurance that the new bank could operate sustainably.

“TriFidus were part of the team responsible for ICAAP and ILAAP analysis. They turned stress scenarios into modelled outputs that enabled our ExCo to review and approve the final business case.”

Laurence Morey, CEO, Pepper Money

The Impact

TriFidus’s integrated support allowed Pepper Money to:

Progress its banking licence application with confidence.
Integrate a major acquisition seamlessly into long-term plans.
Establish a strategic financial modelling framework that continues to underpin resilience and growth.