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Masthaven Finance to become a bank

Masthaven Finance to become a bank

Masthaven Finance has today (14 October) unveiled plans to become a new UK retail bank.

Following discussions with the Prudential Regulation Authority and the Financial Conduct Authority, Masthaven has submitted its banking licence application.

According to bosses the planned bank has attracted the significant investment required to meet UK regulatory capital rules and is preparing to launch in the summer of 2016.

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Masthaven Bank will offer savings and mortgages.

It will also provide specialist mortgages for UK borrowers who don’t necessarily fit neatly into the rigid and uncompromising rules of the big, established lenders, Masthaven bosses said.

Jon Hall, managing director of Masthaven, said: “By being flexible in technology and product design, we will enable savers to make financial choices which better suit their goals.

“Most financial institutions offer savings products over a fixed period, whereas we will offer savings which allow customers to select maturity dates and interest rates that suit them.

“So, if someone is getting married in 19 months’ time, they can have a savings product that matures in 19 months’ time and earn a fixed rate of interest that reflects locking their money away for that length of time.

“Equally, when it comes to mortgage lending, we don’t believe in crude tick box or computer electronic score-carding. For instance, take a customer who is currently on a very low base rate tracker or fixed rate but who wants to extend their property with a loft conversion.

“To use the equity in their property they may have to refinance away from their low rate. Whereas our underwriters will make a lending decision based on each customer’s financial circumstances, along with having a wide range of mortgage options, this means we could potentially lend the cash on a capital and interest basis alongside the existing mortgage.”

As part of its commitment to challenging convention and putting people at the heart of the bank, Masthaven will give share options in the business to its employees.

The new bank will be majority-owned by Andrew Bloom, with the remaining ownership held by the Pears family and Masthaven’s employees.

Andrew Bloom, Masthaven Finance’s founder and Masthaven Bank’s majority shareholder, said: “We want our employees to hold a stake in the business that we will be building together, because as a bank we’re only as good as the people we employ. We appreciate that motivated, talented and engaged employees mean a better customer experience for the people we are here to serve.”

Andrew Montlake, director at Coreco said: “This will be another exciting addition to the banking world and will serve to increase competition to consumers, hopefully in the very areas where more choice is most needed.

“There are still many areas of the lending arena where potential borrowers are feeling disenfranchised and the launch of new lenders in the specialist arena is to be welcomed.”