City of London Group is planning a capital raise of up to £50m early next year to develop its new UK small and medium enterprise bank, the company said as it revealed losses widened in the six months to the end of September.
The company’s losses widened from £2.35m to £3.34m after it took a £1.3m hit on the cost of its banking licence application. Revenue in the period was £3.17m, up from £3.05m in 2018.
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Credit Asset Management Limited, a business to business provider of debt finance, swung to a loss of £63,000 in the period.
The group’s property bridging and development finance business Property & Funding Solutions, reported a profit of £39,000 from a loss of £35,0000 the previous year.
Milton Homes widened losses to £1.66m from £1.45m.
Why it’s interesting
The investment company said it will target a further capital raise of £25m to £50m, following the application for a formal licence for its SME bank Recognise.
After the bank has secured a licence it is expected to start trading in the second half of next year.
What City of London Group said
Michael Goldstein, chief executive of City of London Group, said: “With the formal submission by Recognise of its application for a UK banking licence in November, the group has made considerable progress in implementing its long-term growth strategy of developing its financial services offering for the UK SME market.
“While market conditions remain competitive, the group believes it is well-placed to develop the potential of its existing businesses as alternative sources of credit finance become more difficult for the SME market to access.
“The group remains committed to its vision to serve the UK SME market and continues to evolve with changes in market conditions and the business environment.”