The Bank of England’s Prudential Regulatory Authority and Financial Conduct Authority have given the green light to crowd-funded, digital banking firm Tandem to buy Harrods Bank.
This means it has gained a full banking licence, access to £80m of capital and over 10,000 new accounts. In total, the deal brings Tandem a £375m mortgage book and more than £400m of deposits.
Tandem confirms Harrods customers and their accounts are unaffected and they do not need to take any action. All account numbers will remain the same and all deposit accounts and mortgages will be “serviced as usual”, it said.
Ricky Knox, CEO of Tandem, said: “Building a good bank is incredibly important to us. And the acquisition of Harrods Bank means we can now confidently develop innovative services in line with our mission to make our customers’ lives richer.
“With our new banking licence, our banking app and our fast growing range of services, 2018 is going to be a great year for Tandem.”
Tandem first announced in August 2017 that it had struck a plan to acquire 100% of Harrods Bank and it hoped it would receive regulatory approval by the end of the year.
Tandem will be able to offer deposits because Harrods Bank already has a full banking licence. Given a nod from the regulator, Tandem will be able to move from an app tracking spending, credits and financial services switching, to one offering a range of banking services.
Harrods Bank was put up for sale in April 2017 and has made more than £13m of losses over the last two financial years while lending around £200m in 2015 and 2016.
It lost £4.9m in 2015 and £8.4m in 2016, with analysts suggesting much of its value was attached to its prestigious name.