Masthaven Finance has submitted a banking licence application.
The business claims to have attracted the significant investment required to meet UK regulatory capital rules and is preparing to launch in the summer of 2016.
Jon Hall, who will lead Masthaven Bank as managing director, said: “This is a hugely exciting time to launch a new retail bank in the UK. For too long, savers and borrowers have had to dance to the tune of the big banks. The Masthaven approach will be different, recognising that ‘no one size fits all’ and that everyone’s individual financial backgrounds and requirements vary.”
The intention is to offer online fixed-interest savings products and specialist mortgages.
“By being flexible in technology and product design, we will enable savers to make financial choices which better suit their goals,’ said Hall.
“Most financial institutions offer savings products over a fixed period, whereas we will offer savings which allow customers to select maturity dates and interest rates that suit them. So, if someone is getting married in 19 months’ time, they can have a savings product that matures in 19 months’ time and earn a fixed rate of interest that reflects locking their money away for that length of time.
“Equally, when it comes to mortgage lending, we don’t believe in crude tick box or computer electronic score-carding. For instance, take a customer who is currently on a very low base rate tracker or fixed rate but who wants to extend their property with a loft conversion. To use the equity in their property they may have to refinance away from their low rate. Whereas our underwriters will make a lending decision based on each customer’s financial circumstances, along with having a wide range of mortgage options, this means we could potentially lend the cash on a capital and interest basis alongside the existing mortgage.”
The new bank will be majority-owned by founder Andrew Bloom, with the remaining ownership held by the Pears family and Masthaven’s employees. It will give share options in the business to its employees and up to 80% of current and future employees will be eligible to benefit from them.
Bloom said: “We want our employees to hold a stake in the business that we will be building together, because as a bank we’re only as good as the people we employ. We appreciate that motivated, talented and engaged employees mean a better customer experience for the people we are here to serve.”