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Tandem one step closer to buying Harrods Bank

Paloma Kubiak
Written By:
Paloma Kubiak

Digital challenger Tandem has today received regulatory approval to buy loss-making Harrods Bank, a move which will see it gain 10,000 new customers.

The Bank of England’s Prudential Regulatory Authority has given the go-ahead for crowd-funded, digital banking firm Tandem to buy Harrods Bank.

It brings the firm one step closer to gaining a full banking licence, access to £80m of capital coming into the business and 10,000 new customers.

Tandem first announced in August that it had struck a plan to acquire 100% of Harrods Bank and it hoped it would receive regulatory approval by the end of the year. Tandem should also be fast-tracked down the process to offer deposits because Harrods Bank already has a full banking licence. So given a nod from the regulator, Tandem will be able to move from an app tracking spending, credits and financial services switching, to one offering a range of banking services.

Harrods Bank was put up for sale in April and has made more than £13m of losses over the last two financial years while lending around £200m in 2015 and 2016.

It lost £4.9m in 2015 and £8.4m in 2016, with analysts suggesting much of its value was attached to its prestigious name.

Ricky Knox, Tandem’s founder and CEO said: “This is a major step forward in our plan to acquire Harrods Bank. When the deal is finally done early in the New Year, it will transform Tandem into one of the UK’s leading digital challenger banks.

“This is an exciting time for Tandem. We have a growing customer base, a range of innovative products and a commitment to make our customers lives richer by saving them money and taking away their financial stress.”