Due to a lack of investment Masthaven Bank says it will be withdrawing from the UK banking market over the next two years.
London-based Masthaven, which was founded as a non-bank lender in 2004 and acquired a banking licence in 2016, operates in the B2B and B2C sectors. For example, the challenger targeted the SME crowd with its business savings offering.
Leigh Bartlett, Chief Executive of Masthaven Bank, explains: “We assessed a range of options, but all of them required a significant commitment of long-term capital and we have not been able to secure the level of investment necessary to grow the bank while serving our customers efficiently and effectively.”
Varde Partners invested £60 million pounds in the challenger in 2019, and according to Crunchbase that is Masthaven’s total funding to date.
Bartlett mentioned the “very competitive UK banking market” in his statement. Which is very true.
The big three challengers in the UK – Monzo, Revolut and Starling – are doing reasonably well. But there are many other names out there, and quite a few of them seek action in the SME sector. Recent examples at eWeek UK include Allica Bank and OakNorth. Quite simply, there are a lot of challenger banks – and the high street names – going for the same space.
Masthaven will reduce and ultimately sell its long-term and short-term loan books and return all savings deposits to customers. The bank says it has sufficient capital and liquidity to repay savings customers by the end of 2023, on or before contractual maturity dates. Masthaven had 4,094 mortgage customers and 18,452 savings customers at the end of April.
It had deposits of £773 million for the year ended 30 April. The bank has about 180 staff in London and Reading.
The neobank is working with the UK banking regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), to carry out an orderly retreat.
Unfortunately, not every UK tech firm can be a success story.
As reported last month, ING-backed bond market trade discovery tool Katana Labs shut down.
The London-based company was founded in 2019 with backing from ING.
In his statement on LinkedIn, Santiago Braje, Founder and CEO at Katana Labs, didn’t explain the reason for the closure. He didn’t respond to a request by eWeek UK for comments. Probably not in the mood.