Helping hand for new banks to emerge

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THE government says it is determined to support increased competition and new entrants in the banking sector, at a time when a number of “challenger banks” are believed to be planning flotations.

In his Budget, Chancellor George Osborne said action to remove barriers to enter the banking market had been successful, with 25 applicants seeking a banking licence, compared with only six in March 2013.

It was also announced that there would be new consultation on legislation to help match SMEs (small and medium-sized enterprises) who are turned down for a loan with alternative lenders in order to broaden the sources of finance available to small businesses.

There is speculation that smaller lenders such as Aldermore, which employs 35 staff at its base in Cleckheaton, are gearing up for an initial public offering (IPO).

A spokesman for Aldermore said: “Aldermore raised £40m of new capital in December. The deal also established a wider dialogue with institutional investors as we continue to review its capital market strategy which may, among other strategies, include an initial public offering.”