Challenger bank Shawbrook today unveiled plans for a £1 billion stock market flotation as it looks to weaken the stranglehold of Britain’s “big five” banks.
The company, chaired by former Royal Bank of Scotland boss Sir George Mathewson, hopes to raise £90 million to build capital and develop new products.
It provides loans to individuals and businesses in sectors it says are poorly served by its larger rivals.
Shawbrook’s existing backers, including Pollen Street Capital, are expected to sell down their holdings during the IPO.
“We believe we are well-positioned to achieve long-term sustainable growth and that Shawbrook will become an increasingly well-known name in the specialist world of British banking,” chief executive Richard Pyman said.
Shawbrook increased customer loans by 70% to £2.3 billion last year and made a pre-tax profit of £49.1 million.
The bank said it intended to pay a modest dividend in 2016, followed by a payout equivalent to 30% of its post-tax profit in 2017.
The British banking industry is dominated by Lloyds Banking Group, HSBC, RBS, Barclays and Santander UK.
Shawbrook’s news comes just days after shares in rival challenger bank Aldermore surged on debut. Its shares are now trading around 220p compared with a listing price of 192p.
