LONDON (Reuters) – Britain’s banking regulator has approved Tandem’s takeover of Harrods Bank, the app-based financial services provider said on Wednesday, providing the licence and capital it needs to become a full-blown bank nine months after it lost both.
Tandem, which counts the founder of Ebay <EBAY.O> as an investor, is a digital-only lender focused on customers in their 20s and 30s and one of several such banks bidding to poach market share from the likes of Barclays <BARC.L>, Lloyds <LLOY.L>, HSBC<HSBA.L> and Royal Bank of Scotland <RBS.L>.
Acquiring Harrods Bank, which offers personalised banking services from London’s luxury Harrods department store, will provide Tandem with around 80 million pounds in capital, 10,000 customers and the bank’s loan and mortgage book, worth 338 million pounds according to accounts as of January 2017.
“When the deal is finally done early in the New Year, it will transform Tandem into one of the UK’s leading digital challenger banks,” said Tandem founder and CEO Ricky Knox.
The takeover, which was announced earlier this year, was approved by the central bank’s Prudential Regulation Authority (PRA).
It had stripped Tandem of its licence in March after a Chinese conglomerate pulled 29 million pounds in funding it had needed to take deposits and broaden its retail banking offering.
Tandem is one of a growing list of digital-only banks hoping to capitalise on upcoming regulation to take market share from bigger rivals.
(Reporting by Emma Rumney; editing by Jason Neely)