Bank North goes to the wall

Bank North, the Manchester-based banking startup aiming to disrupt the UK's £150 billion SME lending market, is to wind down its operations after failing to secure a new funding round.

In a sign of the deteriorating economic situation, Bank North was trying to find £30m to secure a full banking licence from the Bank of England, which would have allowed it to take deposits from retail savers.

Bank North raised £20 million last year - including a £4.45 million investments from Estonian financial services firm LVH - and was granted a restricted licence by the Prudential Regulatory Authority.

But in a letter to shareholders over the weekend, seen by the Daily Mail, the bank’s chairman Ron Emerson said it had been unable to secure the funds needed to keep it afloat.

"It is therefore with great regret that I have to inform you that… the board of Bank North has decided to initiate a solvent wind-down of the bank, with immediate effect."

The stricken bank is reportedly in talks with an unnamed third party to sell its £17m loan book and transfer its Manchester-based lending team - about a third of its 60 staff.

Emerson says that completion of the transaction is "critical to ensuring a solvent wind-down", which would enable the bank to guarantee full payment of creditors, including staff, and to cover outstanding liabilities.

By on Mon, 03 Oct 2022 12:15:00 GMT
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