One nation, many challengers

One nation, many challengers

Acorn Financial Partners (AFP) has submitted a banking licence application to the UK’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).

On authorisation, AFP will be called Redwood Bank, a new UK-based SME challenger bank, and it anticipates receiving its licence early in 2017 and opening to customers later the same year.

AFP’s majority shareholder is Acorn Global Investments (AGI), a company controlled by David and Jonathan Rowland, who have experience in the banking and finance sectors.

Jonathan Rowland, “intended” chairman of Redwood, says its timing is ideal as “major banks have not returned to anywhere near their pre-crisis business lending levels and the uncertainty caused by Brexit is likely to worsen the situation”.

AGI was established in 2015 to invest in financial services and in particular the banking sector. It will continue to be the majority shareholder of the bank and is supported by a number of investors including: Wildcat Capital Management, Rick Gerson (founder of Falcon Edge) and David Williams (founder of Williams Trading). It is anticipated that current and new shareholders will invest £50 million in the bank over the next five years.

Jonathan Rowland, who will, subject to regulatory approval, be the chairman of Redwood, played a role in the restructuring and subsequent recapitalisation of Kaupthing Bank Luxembourg, the Luxembourg subsidiary of Kaupthing Iceland, into Banque Havilland SA and Banque Havilland (Monaco) SAM. Jonathan Rowland was chief executive and a director between 2009 and 2013.

The senior management team of Redwood will be led by Gary Wilkinson as chief executive, again subject to regulatory approval. Wilkinson has over 30 years’ experience within financial services, and is the former chief executive of Cambridge & Counties Bank, which provides lending and deposit products for SMEs. Wilkinson led Cambridge & Counties’ authorisation and launch in 2012 and its move into profit after just 13 months. Prior to this he held a number of senior roles in the banking and building society sectors.

Headquartered within its “heartland region” and on the border of Bedfordshire and Hertfordshire in the UK, Redwood will offer secured SME lending products to owner occupied businesses, as well as to commercial and residential property investors. It will also provide business deposit accounts.

With so many new entrants trying to muscle into the UK banking sector, Banking Technology has put together a comprehensive list of the known challengers to date and the technology they are using.