A new UK bank backed by steel tycoon Sanjeev Gupta has opened its doors to retail savers, with the aim of boosting lending to small industrial and manufacturing businesses.
Wyelands Bank launched a range of savings accounts on Thursday to fund finance for new companies that want to expand.
The bank, formerly known as Tungsten, was bought by Mr Gupta for £30m at the end of last year, as part of his plan to spur the growth of British industrial businesses.
Mr Gupta, a renowned industrial entrepreneur, heads the GFG Alliance, a global enterprise that includes the Gupta family’s energy-related operations in the Simec Group. It also includes Liberty House, the company that bought two Tata Steel mills in north-east England two months ago.
Mr Gupta said: “I believe strongly in the revival of British industry, and Wyelands Bank will be a champion of those businesses which have vision and ambition. In my view, Britain needs a bank specialising in the industrial [small and medium business] sector that will be a friendly source of finance to oil the wheels of industry, stimulate growth and create jobs.”
Mr Gupta is expected to commit about £100m in share capital, and has already pumped in half this amount. Wyelands will operate independently from GFG Alliance.
It will initially specialise in supply-chain and trade financing, before launching other types of funding for small businesses.
Iain Hunter, chief executive of Wyelands, said a number of specialist banks have emerged in the past few years with the aim of filling the gap left by high street banks that stopped lending after the financial crisis.
“We will get to know the businesses we support in person, give them direct access to decision makers and help them plan for growth. We will do business with a human face, using our deep expertise in business finance, not just algorithms and computer code,” he said.
There is a trend in the UK for entrepreneurs to move into specialist lending and retail banking. Earlier this week, Jonathan Rowland, who founded the now-defunct internet incubator Jellyworks, opened Redwood Bank, which focuses on lending to small and medium businesses.
Tungsten, which was founded by city financier Edmund Truell to help businesses manage their cash flows, was forced to sell its banking licence because of high costs and regulatory complexities.
Mr Truell stepped down from the board of Tungsten last year after it rejected his proposals for restructuring.