Redwood Bank launches with mortgage offering

As part of its opening service it is offering tailored lending products to business owners and professional landlords.

It will lend between £50,000 and £1.5m up to 70% loan to value (LTV) and requires net rental income to cover at least 130% of monthly repayments.

Redwood claims to be the first business bank with a fully cloud-based infrastructure and said its service would be built around regional managers.

Mortgage Solutions previously reported in April that its products would be available through a panel of brokers, however this has not been reconfirmed.

The lender is also servicing SMEs by including a 35-day business deposit account.

Public sector investment

An application for the banking license was originally submitted by Acorn Financial Partners late last year when its founders anticipated £50m of investment in the next five years.

The bank is wholly-owned by Redwood Financial Partners Ltd, a company controlled by Jonathan and David Rowland, in which Warrington Borough Council has a 33% stake.

As part of this, the council’s executive board has approved an investment of £30m in Redwood as part of the bank’s capital funding.

The bank is headquartered in Letchworth and said it would offer a “personalised, relationship-driven service nationwide”.

However, it’s main focus will initially be Hertfordshire, Bedfordshire and Buckinghamshire as well as in Warrington, where a regional office has been opened to support SME growth in the town and region.

Property opportunities

Co-founder and chief executive Gary Wilkinson will oversee the day-to-day running of the bank. The board includes co-founder and non-executive director Jonathan Rowland and chairman David Buckley.

Buckley has held various senior roles in financial services companies including Morgan Stanley, Morgan Stanley Bank International and Goldman Sachs and is currently independent non-executive director and audit committee chairman for CIBC World Markets.

Wilkinson said the bank was pleased to be open for business so soon following the issuance of its initial banking licence.

“We aim to offer a real alternative for small and medium sized organisations, providing them with simple transparent loans and savings accounts, great service and a promise that our money is being invested into British businesses and our local communities,” he said.

“As many traditional banks are hampered by poor lending practices from their past and their legacy systems, we are perfectly positioned to help British SMEs take advantage of property opportunities by offering a highly-tailored service for clients that is built around our very experienced regional managers.”