Lord Mandelson-backed start-up bank raises £25m from investors

Lord Mandelson, Gordon Brown's former business secretary and architect of New Labour, is the bank's deputy chairman. Photo: Jamie Lorriman

Bank of London, the new clearing bank whose board includes Lord Mandelson, has raised £25 million from investors after a second annual loss.

The company, founded in 2021, raised new capital in November. to meet regulatory capital requirements after obtaining a banking license, documents show.

It received approval from the Prudential Regulation Authority and the Financial Conduct Authority in February last year.

The bank's losses for the year ended December 2022 widened to £41.8 million from £15.7 million ​​pounds sterling, new reports show. A hiring boom and technology spending pushed the bank into the red.

Bank of London did not generate revenue for the period as the company has not yet officially begun trading. The company signed up its first client in April last year and is likely to show turnover when its 2023 accounts are filed.

The clearing bank was founded by so-called Insta-banker Anthony Watson, a prominent LGBT activist. who has previously donated to the Labor Party.

Watson, 47, has given thousands of pounds to Labor MPs. and also advised the party on LGBT issues. Last year he was awarded a CBE in the King's Birthday Honors list for services to the LGBT community.

He previously worked for Barclays, Nike and founded cryptocurrency startup Uphold.

p>Bank of London aims to challenge Barclays, HSBC, Lloyds and NatWest by offering clearing services to business clients. It boasts that it is the second clearing bank to open in the UK in 250 years.

Challenger banks such as Monzo and Starling, which currently use the services of the Big Four, are also possible hunting ground for the company's technology platforms.

Attempts to disrupt the financial system that underpins business banking. have drawn growing interest from fintech companies, including rival startup ClearBank.

Lord Mandelson, Gordon Brown's former business secretary and architect of New Labour, is the bank's deputy chairman.

He sits alongside a number of banking veterans, including former Goldman Sachs and Citi boss Harvey Schwartz and venture capitalists.

The bank is supported by Mangrove Capital Partners and 14W, which have representatives on the board of directors.

In 2022, the number of employees increased by 100 people. leading to staff costs doubling from just over £7 million to £20.4 million.

Last year the company said it had completed a Series C fundraising which valued the bank at 1. US$1 billion (£860 million).

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