City Of London Group Preps UK Banking License For Recognise

The U.K. is seeing no signs that its influx of challenger banks will slow down.

Another industry player, City of London Group, is slated to submit its U.K. banking license at the end of the year to launch a new bank dubbed Recognise, a report in ProactiveInvestors said Monday (July 15), as it works to introduce a new small business service to the market.

According to the report, City of London has been working to strengthen its board of directors and enhance its underlying IT infrastructure. The company told the publication it hopes to begin accepting deposits in the “latter part of 2020” and would focus on small to medium-sized business (SMB) lending.

“This has been another year of considerable progress for the City of London Group,” said Michael Goldstein, the firm’s chief executive. “We have built a very high calibre NED team for Recognise, and we remain confident that we will be able to submit an application to the regulatory by the end of 2019, after which we will embark on an institutional capital raise.”

The company posted losses of $4.51 million for the financial year ended March 31, a figure reports said includes the $2.13 million in costs related to the banking license application.

Earlier this year City of London Group announced more than $20 million in new funding which the firm said would be used to build out the small business bank. The investment was raised via the issuing of new ordinary shares and unlisted and unsecured convertible loan notes.

“We are delighted with the support shown by existing and new shareholders for our strategy,” Goldstein said in a statement at the time. “Today’s announcement, and the commitments to raise in excess of £15 million, reflects confidence in the team and the strategy that we have laid down for creating an organization that is positioned to meet the needs of the [SMB] market. We continue to see a clear path for generating shareholder value.”