Redwood Bank, a new UK SME Business bank, has secured a banking licence following approval from the Financial Conduct Authority (“FCA”) and Prudential Regulation Authority (“PRA”).
Redwood will now enter its mobilisation phase and expects to launch to customers later in 2017.
Redwood Bank is wholly owned by Redwood Financial Partners Ltd (“RFP”), a company controlled by Jonathan and David Rowland, who are delighted to announce that Warrington Borough Council (“the council”) has acquired a 33% stake in RFP, the first time a borough council has made an investment of this type. The council’s Executive board has approved an investment of £30m in Redwood as part of Redwood’s capital funding.
Redwood Bank (www.redwoodbank.co.uk) will offer secured SME lending products to owner occupied businesses, as well as to experienced commercial and residential property investors. It will also provide business deposit accounts.
Following the council’s investment, prior to launch Redwood Bank will open a northern regional office in Warrington, which will spearhead the Bank’s lending to SMEs in the town as well as the bank’s Heartland region of the North West.
This will be in addition to Redwood’s headquarters in Letchworth, from which a team of business development managers will provide a highly personalised, relationship-driven service, focusing on SMEs throughout its southern and eastern Heartland regions of Hertfordshire, Bedfordshire and Buckinghamshire.
Warrington Borough Council’s executive board member for corporate finance, Cllr Russ Bowden, said: “This is a really important deal for Warrington and part of our commitment to innovative financial approaches which support growth and sustainability in the borough.
“We see our stake in the company as an investment in our future. It’s about investing in our local economy, helping businesses thrive and generating income which will enable us to protect council services. I’m delighted that the company has now been granted its banking licence and we can move forward towards its launch.”
Jonathan Rowland, Co-Founder of Redwood Bank said: “Securing a banking licence by the PRA and the FCA underlines the strength of our business model and the calibre of our experienced management team. With the opportunities being created by Brexit and the Financial Services sector’s rehabilitation, this is a great time to be entering the market.
“We extend a warm welcome to Warrington Borough Council as a new shareholder in Redwood. It’s clear that the council shares our vision to create a robust, secure and profitable bank that is not only well placed to deliver strong returns but also to stimulate sustainable economic growth in Warrington and the surrounding area. This is a unique Public-Private Partnership that heralds a return to community banking in the UK.”
Gary Wilkinson, Co-Founder and Chief Executive of Redwood Bank added: “In addition to securing the banking licence, considerable progress has been made in building Redwood’s infrastructure. We have established the new bank’s headquarters in Letchworth, Hertfordshire and have been building a talented and experienced management team. We are well on track to open to customers later this year with a proposition built on competitive rates, superior service and straightforward products.”
Redwood will be announcing a number of senior Board-level management appointments over the coming weeks as it gears up for launch.