City of London Group PLC (LON:CIN) has raised £15.2mln in new funds ahead of the launch of a new UK small and medium enterprise (SME) bank.
The finance house raised £13.15mln through the issue of new ordinary shares and a further £2.05mln through the issue of unlisted unsecured convertible loan notes.
New bank to focus on SME lending
The capital raise will support the development of a new UK bank, which will be launched by its Recognise Financial Services Limited subsidiary, once it receives a banking licence.
The bank will be called Recognise and will focus on lending to SMEs.
City of London said Recognise Financial Services – founded by Jason Oakley, the former managing director of Metro Bank’s commercial and mortgages lending business – has continued to progress its SME banking licence application.
Recognise is investing in strengthening its team and developing its operating model ahead of the bank’s launch.
Michael Goldstein, chief executive officer of the City of London Group, said: “We are delighted with the support shown by existing and new shareholders for our strategy.
“Today’s announcement and the commitments to raise in excess of £15mln reflects confidence in the team and the strategy that we have laid down for creating an organisation that is positioned to meet the needs of the SME market.
“We continue to see a clear path for generating shareholder value.”