Conister Bank, an arm of Jim Mellon's Manx Financial Group (AIM:MFX), has been awarded a licence to accept deposits in mainland Britain.
Conister, which is wholly owned by Manx Financial, already has a licence to take deposits in the Isle of Man and is already regulated by the Financial Conduct Authority (FCA) as a consumer lender in the UK.
The Bank of England's Prudential Regulation Authority gave its approval for the new licence, which Conister will use to grow its balance sheet and therefore enable increased lending.
Manx Financial chief executive Douglas Grant said: "This is the first time an Isle of Man bank has been authorised to accept deposits in the UK."
Authorisation to acquire deposits via the bank's Basingstoke branch is a "key step" in the growth strategy, he said.
"We will deploy this additional liquidity to build upon our record lending for the first half of this year in anticipation of achieving a total loan book of £0.4 billion for 2023."
Manx Financial was previously part-owned by Aaron Banks, who like Manx's executive chairman Mellon was a noted backer of the pro-Brexit campaign. Banks sold his stake in the group in 2020.