A challenger bank tends to be a recent (by financial institution standards) start-up, using its independence and absence of legacy to operate against established retail banks in a more nimble manner.
Below is an emerging challenger banks list denoting some of the most well known institutions in the market:
Emerging challenger bank OakNorth is to take part in the UK Enable Guarantee programme, securing a guarantee of £133m from the British Business Bank, the UK government’s economic development bank.
OakNorth will use the guarantee to strengthen further its lending support to fast-growth businesses and established property developers and investors.
The Enable Guarantee programme is designed to encourage banks to increase their lending to smaller businesses by reducing the amount of capital required to be held against such lending.
Under an Enable Guarantee, the UK government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.
Allica is focused on the UK SME market and funded by SME and retail savings, intended to serve businesses through working capital solutions and cash management, including loans, asset finance, savings and payment services. Allica will also address the UK retail market with a range of savings products.
The bank was granted a banking licence by the Bank of England in May 2017 under the planned name of CivilisedBank, but released it a year later with the stated reason of allowing more time to develop its technology platform.
Entering the asset finance lending market in 2017, Wyelands Bank covers trade, receivables, and supply chain finance, including invoice financing, invoice discounting and asset finance to small businesses in the UK.
The bank is independently owned and managed. It was established in 2016 by British industrial entrepreneur Sanjeev Gupta.
In 2019 Gupta completed the acquisition of Diamond Bank UK, now to be known as the Commonwealth Trade Bank.
Diamond Bank UK is the British subsidiary of Diamond Bank of Nigeria. The stated intentions of what is now known as the Commonwealth Trade Bank is “to provide a range of bespoke financial solutions with a vision to reinvigorate Britain’s global trading heritage and expertise with countries like Australia and India.”
City Of London Group
A final addition to the emerging challenger banks list is The City Of London Group (COLG), which has received commitments to raise £15.2m in new funds to support the development of its SME lending business.
COLG’s subsidiary Recognise will also continue to progress its UK banking licence application.
The capital raising is being effected through a combination of the issue to certain new and existing shareholders of, in aggregate, 10,520,000 new ordinary shares of £0.02 each in COLG. Challenger banks list