PCFG’s application for a banking licence has been approved by the Prudential Regulatory Authority (“PRA”) and the Financial Conduct Authority (“FCA”), and the business has made £4m profit year on year in 2016.

The business, formerly known as Private and Commercial Finance Group, said it had £100m in new business volume over the past 18 months, with its total portfolio growing 13% year-on-year to £122m from 2015.

It said it had a record low impairment charge of 1%, with committed debt facilities of £174m (2015: £119m) with headroom at year end of £65m (2015: £32m) to fund portfolio growth ahead of taking retail deposits in summer 2017.

The business added that its profits had been docked £500k costs incurred through the process of setting up its banking licence.

PCFG is now authorised with restrictions as a bank and enters into a mobilisation period of up to 12 months. The authorisation requires it to undertake a number of actions before the bank can apply for those restrictions to be lifted: this includes the development of an enhanced governance framework and the delivery of new technology platforms.

These are designed to protect both the company and new customers, and have been agreed with the PRA and FCA to ensure smooth delivery of PCFG’s deposit taking proposition.

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As part of the banking licence application, PCFG is already well advanced with these processes and the new bank is expected to take its first deposits in summer 2017.

Initially, the bank will support PCFG’s chosen specialist sectors of consumer motor finance and SME asset finance. Once the bank is established, the PCFG board will assess its options for extending the Group’s range of financial products.

Scott Maybury, chief executive officer at PCFG, said: “This is an exciting and transformational event in the history of the Group. I would like to thank the Prudential Regulatory Authority and Financial Conduct Authority for their guidance and assistance throughout the process. The support of our majority shareholder Bermuda Commercial Bank has also been key; however the highest praise must go to the whole team at PCFG who, through their diligence and professionalism, have delivered this strategic goal. The staff have developed both individually and collectively to meet this challenge.

“Unusually for a new bank entrant, we are not a start-up operation and we will be launching from the foundation of an established, focussed and strongly profitable operation. This provides the ideal platform for further growth and our continued success. A diversified source of funding will not only allow us to scale up our loan book significantly, but also mitigates risk in times of economic uncertainty. We look to the future with great optimism.

“Reporting a record level of profit the day after announcing our approval as a new bank underlines the potential for our business. Unusually, for a new entrant into the banking sector, we have an operating platform and portfolio that is already performing extremely well and consistently delivering excellent returns. As such, the Company is equipped to deploy retail deposits immediately and profitably upon completing mobilisation of the bank, allowing us to significantly scale the business.”

“We will complete the build and mobilisation of the banking infrastructure in the coming months and launch the bank offering in summer 2017. I am also pleased that PCFG is returning to the dividend list for the first time in 13 years, which illustrates the stable financial foundations of the Company and is indicative of our intended progressive dividend policy for the future. We approach the year ahead.”