Challenger Bank GBB has secured a further investment of £28m from its cornerstone investor the Teesside Pension Fund.
The new bank, which has pledged to get the UK and its regions building again, secured the investment in top of previous pledges totalling £20m from the fund, to be made when GBB obtains its provisional banking licence expected later this year.
The move underlines the fund’s commitment to supporting the bank’s mission of lending to SME property developers, playing a crucial role in the levelling up agenda.
GBB, will be headquartered in Middlesbrough but will maintain its Newcastle office.
It recently appointed banking veteran Sue Hayes as CEO and whose chairman is Paul Rippon, co-founder of two digital banks Starling and Monzo, is expecting to launch later this year following approval of its banking licence application.
Ms Hayes said: “Accessing finance still remains a challenge for many developers and it’s my ambition to make that a much easier, more straightforward process. We’re delighted the Teesside Pension Fund shares our vision and its fantastic ongoing support will help us through the regulatory journey of becoming a bank.”
Coun David Coupe, chair of the Teesside Pension Fund, said: “We are proud to support GBB in their mission to support SME property developers in the regions and in turn help address the chronic shortage of housing. It’s been a long-term aspiration of the fund to invest in an attractive and well-controlled local opportunity and we’re pleased to have identified a robust, digital start-up such as GBB as a strong way to maximise returns for the Pension Fund’s beneficiaries.”
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Andy Preston, Mayor of Middlesbrough, said: “Having a new bank based in the centre of our town is exactly what we need to give Middlesbrough a further boost, attracting and creating jobs of all kinds, while also shining deserved attention on the town. It will be fantastic to have a bank that’s growing and investing across the North-East from its headquarters in Centre Square.”
Once it officially launches GBB intends to provide property development loans of between £1m and £5m, with lending supporting regional property developers, small and medium sized businesses, and construction companies.
It aims to lend £3bn over five years building a £1bn-plus balance sheet, and will fund almost 20,000 homes and several million square feet of office space, supporting the creation of over 100,000 jobs.