Britain's Financial Conduct Authority (FCA) has opened an investigation into Lloyds Banking Group's anti-money laundering controls, the lender disclosed in its annual report on Thursday.

Lloyds said the investigation related to its compliance with money laundering rules in Britain and the FCA's rules and principles of business, with a focus on its controls framework.

The bank said it has been fully co-operating with the probe and is not able to estimate the potential financial impact, if any.

The FCA declined to comment.

Britain's authorities have in recent years vowed to increase their vigilance of money-laundering controls at the country's top banks, amid criticism that London is one of the world's biggest hubs for the movement of illicit cash.

Lloyds' rival Barclays also disclosed in its annual report this week that it had been investigated by the FCA over its compliance with UK money laundering rules, but had been informed by the regulator that it was closing its investigation.

NatWest was fined 265 million pounds in December 2021 for failing to prevent the laundering of nearly 400 million pounds, in the first criminal money laundering case by regulators against a British bank.

The Lloyds disclosure came on the same day it made a 450 million pound ($570 million) provision to cover potential costs from an ongoing review into motor finance, which it reported alongside its 2023 financial results.

The bank said the provision did not reflect an admission of liability or wrongdoing.

The FCA is investigating claims of historic overcharging by some lenders, which some analysts say could spawn a fresh costly mis-selling scandal for the industry.

($1 = 0.7890 pounds)

(Reporting by Iain Withers and Lawrence White, editing by Sinead Cruise, Kirsten Donovan)