GCV portfolio company Bank North (previously B-North) has been hailed as the UK’s newest and most exciting SME bank after being granted its official banking licence earlier this morning (Authorised with. Restrictions or ‘AWR’) by the UK’s Prudential Regulation Authority (‘PRA’).
The bank will open the doors of its first lending Pod in Manchester 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.
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 ten 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 – a much-needed antidote to the UK’s heavily centralised, standardised banking system, which 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.
“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 CBE, Chair of Bank North commented: “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.”
Leading Bank North’s first funding round back in 2018, GCV has facilitated over £10m of investment into the company since then via the firm’s private investor network, with Bank North’s successful ‘Series A’ funding round also having raised new capital from a number of 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. This round will support Bank North in further developing its technology as well as delivering operating capital to kick off its lending activities.
CEO and Co-Founder of GCV, Norm Peterson, commented: “We’re delighted that Bank North has achieved what is a significant milestone on their journey to transforming SME lending. It is fantastic to have supported the team since their inception with investment from our private investor network, and seeing their tremendous progress over the last three years culminate in receiving their banking licence is superb. The future for Bank North and SMEs throughout the UK is now particularly exciting.”
Madis Toomsalu, CEO of LHV Group commented: “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 a 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.”
Now poised to tackle the UK’s £150bn SME lending market head-on, Bank North have their sights set firmly on the next exciting chapter of growth as a fully qualified bank, with the full backing of GCV behind them.