A new specialist lender is preparing for market launch headed by Metro Bank’s former managing director of commercial banking and mortgages, Jason Oakley.
City of London Group (COLG) aims to launch the lender within two years and is currently in the process of obtaining a banking licence.
In particular, the firm will enter the commercial lending, SME, bridging, and development finance sectors.
Joining Mr Oakley will be Bryce Glover, former MD of commercial banking at Alliance & Leicester/ Santander.
Mr Oakley and Mr Bryce have both bought shares of £400,000 and £50,000 respectively in the Aim-listed business.
The group also wants to relaunch into equity release, having bought Milton Homes as part of a reverse takeover in October for £19.7m.
Meanwhile, the third business in the group, Credit Asset Management Limited (CAML), has started the process of establishing a new line of business called Property & Funding Solutions (PFS) to provide bridging and development finance for commercial clients, as well as secured lending for customers of the existing CAML business.
The launches are part of an underlying three-pronged strategy for its property and financial services business, for which it recently raised £20m.
Michael Goldstein, chief executive officer, said: “I am delighted that our banking licence application will shortly be under way.
“We are also in the process of establishing our new business line in property bridging funding under the existing CAML business and our re-launch of the Milton Holmes equity release business may be achieved more quickly than originally envisaged.
“Overall, the future is looking bright with a strong leadership team in place to deliver on all our strategic objectives.”
COLG reported a loss before tax of £0.2m in the six months to September but CAML posted a profit of £185,000, its accounts out on 19 December showed.
The CAML business completed a re-financing exercise and arranged an additional £4m block funding facility with Hampshire Trust Bank on competitive terms during the period.
COLG raised £3m through the issue of additional shares, after allowing for costs relating to the capital reorganisation, issue of additional shares and the acquisition of Milton Homes.
Chris Dailly, CEO at Jumbo Bridging, suggested it was a difficult time for any new specialist lender to come into the bridging market as it was already “overcrowded”.
He said: “It is not a good time to come into the market unless you have got something very unique or different to offer.
“Too many short term lenders are driving the price down so I don’t know how they are going to meet the targets they have set themselves.
“In the last 10 years this the most crowded it has been. But I do wish them luck.”