Following a recent challenge from tax authorities, the emerging clearing bank, Bank of London, which has the support of the powerful Lord Mandelson, recently secured an additional £42 million from investors.
Did you hear about the latest news from the financial company? Apparently, Mangrove Capital Partners of Luxembourg led the funding round that closed in August. Quite interesting, isn’t it? Mangrove has a reputation for supporting successful companies like Skype. The CEO, Mark Tluszcz, is a member of the BoL board.
The funding announcement did not mention the tax debacle, focussing instead on how the investment would help the bank grow in its core UK market.
On the bright side, this news should ease any worries about the bank’s future. Last Thursday, HM Revenue and Customs filed a winding-up petition against the bank in UK courts, but it seems like things are looking up now. The company is keeping tight-lipped about the amount owed, and there’s no clear indication of how long these taxes have been left unpaid.
An insider familiar with the BoL situation revealed that the HMRC petition was a result of a miscommunication within the organisation regarding its tax obligations. According to sources, the management team was reportedly unaware of the issue until recently. However, once they became aware of it, they swiftly resolved the matter in a matter of hours.
A spokesperson for BoL clarified that the £42m fundraising occurred before and was not connected to the winding-up petition. There were some interesting rumours going around about the recent changes in leadership. Apparently, the chief risk and compliance officer, Stephen Bell, has taken over as chief executive from the founder, the former Barclays executive Anthony Watson. It seems like there’s more to this story than meets the eye. Did you hear the news? Watson is moving on to a new position as a senior adviser and board member. Quite the change, isn’t it?
The bank has interesting connections with the Labour party, as Watson had previously been a member of the party’s business and enterprise advisory council prior to the July general election. Mandelson, a former Labour cabinet minister under Tony Blair and Gordon Brown, also holds a position on the board as BoL’s deputy chair.
Discussing the funding round, Tluszcz expressed his thoughts on the Bank of London’s success, highlighting the confidence investors have in its leadership and unique model. The bank has a strong position to shape the future of financial services and we are delighted to provide our support.
It’s quite interesting to note that the BoL, being the second clearing bank to enter the UK market in 250 years when it launched in 2021, is experiencing its first notable bout of turmoil.Unlike traditional banks, these institutions focus on providing clearing and settlement services for business customers. They play a crucial role in facilitating transactions and payments.
According to its website, the BoL focusses on catering to businesses with intricate, global, or regulatory requirements. The website boasts that it can swiftly open accounts for unregulated financial companies in just 20 minutes.
In addition to ClearBank, the BoL is aiming to shake up the dominance of the big four banks – NatWest, Lloyds, Barclays, and HSBC – which are the preferred choices for clearing services in the UK.
The BoL, with offices in Belfast, New York, and North Carolina, has seen tremendous growth since its valuation of $1.1bn (841m) in 2023. With a client base of 4,500 clients and £500m in deposits, it has become quite a force to be reckoned with. Last year, there was quite a buzz when this company emerged as one of the contenders vying for the acquisition of Silicon Valley Bank’s UK division amidst the banking crisis that had the industry on edge in March 2023. Surprisingly, SVB UK was eventually acquired by HSBC for a mere £1.
Bell confidently stated that their banking model is founded on the principles of security and simplicity. Businesses can trust that their funds will always be available by holding deposits at the Bank of England. Our success in completing this £42m funding round highlights the strong investor support and confidence in our vision, and I am thrilled to take