Setback for UK challenger bank Tandem

Setback for UK challenger bank Tandem

UK challenger bank Tandem is not to receive any further investment from retail chain House of Fraser. House of Fraser invested £6 million in December, as part of a planned £35 million injection.

However, the second tranche has been cancelled “due to uncertainty about whether China’s State Administration of Foreign Exchange would approve the transaction”, according to Tandem.

As a result, Tandem has “paused” its plans to offer savings products to customers. This means it is surrendering (temporarily) its banking – i.e. deposit-taking – licence, which it acquired in late 2015.

However, it assures that the setback won’t delay its launch to the market, “with the app still launching to the public in the coming months, followed by credit cards later this year”.

Ricky Knox, founder of Tandem, comments that “the only change for customers is that we will no longer be launching savings accounts in the short term”. He states: “We will be in a position to quickly re-apply for our permissions to offer savings accounts at the right time for our customers.”

The bank is also being “restructured”.

House of Fraser remains Tandem’s investor (via Fraser Financial Services) and partner, the bank confirms.

“The strategic partnership to make a new generation of financial services products available to House of Fraser’s multi-million customer base remains a priority for both parties,” Tandem states.