City of London Group collapses to £ 5.8million half-yearly loss
City of London group losses collapse to £ 5.8million despite growing popularity of subsidiary Recognize Bank
- Half-year figures for the City of London group showed a half-year loss of £ 5.8million
- But the subsidiary of the SME-focused company, Recognize Bank, is doing well
City of London Group fell to a pre-tax loss of £ 5.8million in the six-month period ending September 30, down from a loss of £ 2.6million in the prior half-year.
The group said £ 5.6million of the latest half-yearly loss came “from Recognize Bank, in line with its business plan, as it grows its business.”
In September, Recognize Bank, an SME-focused lender and subsidiary of COLG, saw its deposit restrictions lifted by the Prudential Regulatory Authority, allowing it to launch its personal and business savings products, and begin accepting deposits.
Figures: City of London group fell to a pre-tax loss of £ 5.8million in the six months ending September 30
According to COLG, Recognize Bank launched its first personal savings products within two business days of receiving its full license.
He added: “The five-year fixed rate account and the market-leading 95-day notice account have proven popular with depositors, attracting deposits of over £ 60million.”
COLG said Recognize Bank has received more than £ 1 billion in loan proposals since November and has partnered with more than 60 trade finance brokers.
COLG also said it raised £ 11.6million pre-spend in September from shareholders, including two of its major shareholders.
He added: “The net proceeds, as well as funds generated from the sale of non-core and in-house businesses, have been invested in Recognize Bank to support its capital base and allow it to continue to focus on building his loan portfolio. “
Philip Jenks, Chairman of the City of London Group, said: “We are delighted that our subsidiary, Recognize Bank, became a fully licensed UK SME bank in September when the PRA lifted all restrictions, allowing entry into the UK savings market.
“Recognize Bank successfully launched its first savings products within two days and is now able to move its business plan forward and focus on meeting the future needs of the UK SME sector.
“In obtaining a UK banking license, we are indebted to the hard work and vision of the Recognize Bank team, as well as the continued support of committed shareholders who understand the SME market and share our vision of ” a successful, secure and sustainable banking deployment. the latest technology.
“The results for the six months reflect the costs incurred to develop the business of Recognize Bank and are in line with the business plan.
“Within six months, the divestiture of the group’s non-core businesses was finalized, subject to regulatory approval for the sale of Milton Homes. The run-off of the PFS and CAML / PFL portfolios continues to progress smoothly as clients’ future lending needs are addressed through Recognize Bank.
“While uncertainties remain over the lingering impact of the COVID-19 pandemic, we believe fundamentals in the UK continue to point to a steady economic recovery.
“Recognize Bank, which does not have a historic portfolio and a very experienced management team, is well placed to capitalize on the opportunities this will offer. The funds invested in Recognize Bank to date will support the future growth of the balance sheet as Recognize Bank implements its business plan and moves towards balance. ‘
In August, COLG sold its consulting firm Acorn to Oaks Financial Services as its business focused on its banking arm.