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Bank North – previously B-North – has become the UK’s newest SME bank having been granted its banking licence by the UK’s Prudential Regulation Authority (PRA).
The Manchester-based bank will open the doors of its first lending Pod in the city later this year, before a managed roll-out across the UK.
It will start lending in October 2021, delivering flexible, borrower-friendly and fast-paced support for businesses.
It says its model is unique, built on seamlessly-integrated, cloud-native banking technology, which powers a network of regional ‘Pods’, where experienced bankers will deliver committed finance to businesses up to 10 times faster than the industry standard.
These pods are the backbone of a unique de-centralised model where loans are tailored to the circumstances of each business, locally decisioned and locally delivered, which Bank North says is a much-needed antidote to the UK’s heavily centralised, standardised banking system, which it says has left many businesses with no local contact at their bank, and where support has been steadily degraded over the last decade.
Jonathan Thompson, founder and CEO of Bank North, said: “This is a landmark for the team at Bank North who have been working tirelessly to build the most customer-focused bank possible.
“Our model is groundbreaking and there has never been a more compelling backdrop to launch a new regional bank for the UK, as the country looks to build back better and recover from the ravages of the COVID-19 pandemic.”
He added: “SMEs will be the lifeblood of economic recovery. We owe it to the UK’s innovators and entrepreneurs to help them access the funding that will enable them to grow and create opportunity across the country. We’re here to help these businesses thrive.
“I want to thank our wonderful team at Bank North for their personal sacrifice and hard work, our investors for their faith in our model, and the UK regulators for their constructive engagement with us. Getting to this stage in building a bank is not easy, but the whole team and I are proud of what we have achieved. Now the hard work really begins.”
Ron Emerson, chair of Bank North, said: “I am delighted that Bank North has secured authorisation from the PRA. This represents a significant vote of confidence in our business model and our team and I am confident that Bank North will be delivering much needed funding to the SMEs of the UK at speed over the coming months.
“Our focus on regional pods, as opposed to a centralised structure, will help spread opportunities for growth around the country.
“We believe that locally available finance will be critical in enabling the UK’s regions to level up. Talent is not confined to particular areas of the UK, and nor should our banking systems be.”
Bank North has also closed a successful ‘Series A’ funding round, raising new capital from blue chip investors, including the likes of LHV Group, LHV Asset Management, Skipton Building Society, Channel 4 Ventures, Greater Manchester Combined Authority, Dean Benson, a successful UK-based entrepreneur, and Steve Davis, entrepreneur and CEO of Grantside Ltd.
The round will support Bank North in further developing its technology as well as delivering operating capital to kick off its lending activities.
Madis Toomsalu, CEO of LHV Group, said: “We are very excited to become a part of the Bank North story on the way to success.
“Small and medium sized businesses are essential to a healthy economy and we have learned that to help SMEs reach their goals, a bank should really know their clients’ local marketplace. We can see many parallels between LHV and Bank North’s ambitions and we know how an experienced team and a focus on technology can bring desired results in today’s banking.”
Skipton Group chief executive, David Cutter, said: “We have always said that we will consider commercial opportunities as and when they arise if we feel they have the potential to support the long term best interests of the Society.
“While clearly providing a different proposition to Skipton Building Society, Bank North not only offers possible investment opportunity for us, but also shares a number of values that we recognise and believe are just as important to the commercial sector as they are for us.
“Formidable personalised service and modern technology coupled with expertise, understanding and sound knowledge will offer value for SMEs as they develop and grow. We’re excited to be an anchor investor in Bank North, and look forward to seeing it play an important role for SMEs over the coming months and years in supporting the UK’s economic recovery.”