Private equity owners at Shawbrook want to revive their plans to float the bank to boost the London Stock Exchange.
Shawbrook was purchased by BC Partners and Pollen Street Capital in 2017 for £868million.
Private equity firms had previously considered selling the bank or listing it on the stock market in 2022. They sought an estimated valuation of around £2 billion. However, they abandoned these plans due to volatile markets later in that year. Shawbrook also considered a bid for Co-operative Bank in the past, and briefly looked at a deal with Metro Bank. However, neither deal was completed.
Shawbrook was briefly listed on the stock exchange before. Since 2021, the specialist savings and loaning bank has been headed by Marcelino Cárrillo as its chief executive. Its roots can be traced back to Whiteaway Laidlaw in Manchester, which was purchased by Royal Bank of Scotland Group’s private equity arm in 2011.
Pollen Street was created by RBS (now called NatWest), which spun off its private-equity business. Pollen Street listed Shawbrook in 2015, valuing the bank at £725million. Pollen Street teamed up BC two years later to take Shawbrook private.
Since then, Shawbrook’s growth has been rapid. In 2022 it generated a record-breaking annual profit of £233 millions, up from £86.5 in the year that it was delisted. By September of last year, the bank’s loan book reached £12.6billion and it had received £13.4billion in deposits.
Shawbrook’s listing is believed to be in its early stages. Any float, however, would give London’s equities markets a boost.
The market has been roiled by concerns about inflation, rising interest rates and war in Ukraine. The disastrous listing by CAB Payments in the past year has dampened investor confidence.
In July, the cross-border payments group sold 335p shares to achieve a valuation of £851million. The share price plummeted after investors were scared by a CAB shock profit warning in October. This sent the stock to as low as 46p.
Businesses are looking to move their primary listing from London, which has contributed to the decline of new companies. Flutter Entertainment, a gambling group, as well as Smurfit Kappa packaging, plan to move to New York their main listings. Tui, a travel company, is looking to list its shares in Frankfurt. This has led to broader concerns over the health of UK capital markets in both the Square Mile as well as Westminster.
Investment bankers have a cautious optimism that the flotation markets will improve after the summer. This is due to the Financial Conduct Authority’s revamping of listing rules, which should be in force by this year. The regulator hopes to make London more attractive for companies looking to sell their shares by easing the listing rules.
BC, Pollen Street, and Shawbrook’s spokesmen declined to comment.