REDWOOD Bank, the new UK business bank in which Warrington Borough Council has controversially taken a 33 per cent stake, has secured a banking licence.
The bank is wholly owned by Redwood Financial Partners Ltd (RFP) – in which the council has agreed to invest £30 million as part of Redwood’s capital funding.
Warrington Borough Council’s lead 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.”
The new bank, which will loan to small and medium sized enterprises (SMEs), is to open a regional office in Warrington, which will spearhead the bank’s lending to SMEs in the town as well as in the bank’s heartland region of the North West.
Redwood will now enter its mobilisation phase and expects to launch to customers later this year.
Redwood say it is the first time a borough council has made an investment of this type.
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.
Jonathan Rowland, co-founder of Redwood Bank said: “Securing a banking licence by the Prudential Regulation Authority and the Financial Conduct Authority 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.”
A number of local residents have criticised the council for its involvement with Redwood Bank – and the Liberal Democrat opposition group has expressed surprise that the Labour-controlled council would get involved after what it had to say about banks during the financial crash.