Ex-Barclays chief set to launch new small business bank
OakNorth seeks FCA approval and will look to accelerate business loans
A former Barclays executive is set to launch a new bank targeting small and medium sized businesses, in a test of the Financial Conduct Authority (FCA)’s pledge to accelerate approvals for new business lenders.
Sky News reported that OakNorth, which has secured backing from a group of leading investors, is one of 20 new banks which are pursuing lending licences from the City watchdog.
Set up by former Barclays head of UK operations Richard Davies, OakNorth’s Linkedin profile says it will ‘focus on the entrepreneurial community in the UK’ by offering a ‘wide range of lending and saving products’ to assist small firms and investors in financing growth.
Davies will be joined by a senior team that includes Chris Dailey, who was an executive of Aldermore, another challenger bank that has emerged in Britain following the financial crisis.
Last summer, the FCA said it would relax its rules on capital and liquidity for new entrants to the banking market – two of the main obstacles preventing many banks from entering the heavily regulated market.
The news comes as Labour leader Ed Miliband vows to make the creation of new banks a vital part of his planned economic policy – pledging to create at least two credible competitors to the country’s five biggest lenders.
Business secretary Vince Cable told Sky News: “New banks entering the market should be encouraged as they provide choice to customers and are an important source of finance for small businesses.
“Regulators have taken moves to improve the way they authorise new entrants, working closely with the banks and providing time for those that need to get staff and investment in place.
“They have reported an increase in the number of potential new banks they are in talks with, which is promising.
“However, most applications under consideration are for niche banks and to have meaningful competition we need banks with the significant technological platform, the kind TSB and Williams and Glyn received from their parent banks [Lloyds Banking Group and Royal Bank of Scotland.”