North East-based lender GB Bank says its strategy to support regional property developers remains relevant despite challenges in the economy.
Bosses of the challenger bank, which received its full banking licence in August 2022, described a year of progress in which there had been strong interest for its range of lending products, which was expanded in response to significant pressures facing the property market. Problems include disruption to the supply chain and manpower shortages, the impact of policy on rental markets and the need to adapt to climate change, it said.
In new accounts for 2022, the Middlesbrough-based bank said the year had been a challenging one for property developers and investors as rising inflation and interest rates forced them to adapt. The documents show a year in which GB Bank moved from its development phase to launch, following a further £28m funding from cornerstone investor Teesside Pension Fund. So far, £20.1m has been drawn down by the bank but efforts to raise more capital were frustrated by the economic and political backdrop.
Read more: Everflow founder Josh Gill steps back as CEO in management shake-up
Read more: Atom Bank reveals £100m fundraise from shareholders
Wider operating losses of £9.3m, up from £8.5m the year previously, account for spending on the bank’s infrastructure and its internal governance and management structures. The bank said there had been costs associated with hiring key staff in order to submit its “variation of permissions” - a process which allowed it to expand the scope of its lending.
And during the year the bank underwent an extensive shake-up of its management with the resignation of chair Paul Rippon, after two years in post, and non-executive directors David Price and Jerome Moisan. Chairman Mike Kirsopp thanked Mr Rippon, who co-founded app-based challenger bank Monzo, and the past directors for having been instrumental in getting GB through its pre-launch mobilisation phase.
The movements followed the appointment of Stephen Lancaster as chief executive, the third CEO in less than two years. He replaced Sue Hayes, who left the business after seven months to become CEO of the Nottingham Building Society. Ms Hayes had replaced Steve Deutsch, the bank’s first CEO, who oversaw its progression from a start-up before leaving at the end of 2020.
Most Read
GB also said it had appointed a firm of professional advisors to lead its approach to capital markets while its own team continued to speak to local authorities, family offices and others about investment. It said that despite fundraising difficulties posed by turmoil in international markets the bank remained a “relevant and attractive proposition” and that it continued to pursue all opportunities vigorously.
Mr Kirsopp said that despite the challenges, 2022 was a landmark year for GB Bank. He said: “Notwithstanding a heightened competitor backdrop, GB Bank is already attracting savings customers across the length and breadth of the country with our simple and competitively priced savings accounts. We have also engaged the interest of borrowing customers and industry brokers. With the growth and broadening of our lending solutions offering, we can now support the property developer and investor market through the whole life cycle of their property journey.
“Whilst headwinds are forecast to continue through the coming years, I take confidence in our ability to adapt to the conditions and to continue our path to growth by serving our customers with insight as to their needs, strong risk management, high quality levels of service and most importantly having committed and talented people on our team.”
Since receiving its banking licence in August last year, GB Bank says it has approved more than £60m of new loans and completed almost £33m. And in the same time frame its savings account products have attracted a balance of about £300m.
Following publication of the accounts, CEO Stephen Lancaster, said: “We’ve been delighted to see the demand for our lending solutions and savings accounts go from strength to strength into 2023. We want to build better futures for the communities who need it most and we’re delighted to say we’ve been doing just that.
“Our fantastic team have been working hard to get deals completed in record-breaking turnaround times, whilst maintaining excellent customer satisfaction. We have huge ambitions as a business and for the North East, so we look forward to supporting more SME property developers and investors in the future.”