After suffering a second consecutive annual loss, the Bank of London, which is a newly formed clearing bank with Lord Mandelson as its chairman, raised £25m in investment funds.
After winning a banking license, the company was launched in 2021. In November, it raised new equity to meet regulatory requirements.
The Financial Conduct Authority and Prudential Regulatory Authority approved it in February.
New accounts reveal that losses at the bank increased to £41.8m by December 2022, from £15.7m. The bank’s losses were exacerbated by a hiring spree and spending for technology.
Bank of London did not generate any revenue during this period, as it had yet to start officially trading. It signed up its first client in April last year and will likely show a turnover by 2023 when the accounts are filed.
The clearing house is founded by Anthony Watson (also known as Insta-Banker), a prominent LGBT activist who previously donated money to the Labour Party.
Mr Watson, a 47-year-old man, has given thousands of pounds in donations to Labour MPs, and he also advises the party about LGBT issues. In the King’s Birthday Honours List last year, he was awarded the CBE for his services to the LGBT Community.
He worked previously at Barclays and Nike, as well as founding a cryptocurrency startup called Uphold.
Bank of London wants to compete with Barclays, HSBC and Lloyds by offering clearing services for business customers. It boasts that it is only the second clearing-bank to launch in the UK for 250 years.
Challenger Banks such as Monzo, and Starling , who use the Big Four’s services, could also be a potential hunting ground for their tech platforms.
Fintech companies have shown increasing interest in disrupting the financial infrastructure that underpins business banks, including ClearBank.
Lord Mandelson is the deputy chairman of this bank. He was formerly Gordon Brown’s business secretary and architect of New Labour.
He is seated with a group of banking veterans including Harvey Schwartz (former Goldman Sachs Citi executive) and venture capitalists.
Mangrove Capital Partners, 14W and both of their representatives are on the board.
The number of employees increased by 100 in 2022. Staff costs doubled from just under £7m to £20.4m.
The company announced last year that it had closed a Series C fundraiser which valued the bank as $1.1bn.