The RGU alumnus who built a new UK specialist bank
RGU alumnus Stephen Lancaster graduated from the University back when it was RGIT in 1989 with an HND in Computing. Over the last 35 years, he has worked in multi-national businesses as well as start-ups. He shares his most recent experience as Co-Founder and CEO of GB Bank with us.
In March 2017, I answered a call to my mobile phone and a simple question, “how about we start that bank we’ve been talking about?”
There had been conversations about the need for a new bank, particularly one serving property developers and landlords in the northern regions of England. Following the financial crisis in 2008, property professionals felt that the big banks had withdrawn into London and the Southeast leaving many in the regions without access to finance for their projects.
This financial vacuum was initially filled by new types of lenders including peer-to-peer, crowdsourcing and non-bank lenders, though finance from these firms was typically provided at higher interest rates. To meet the level of demand, at rates that would make property projects profitable, required a bank.
On 29 August 2017, we met with the New Bank Start-up Unit at the Bank of England and after quite a grilling of “why do you want to be a bank?”, were invited into the application process.
There are three stages to the new bank application process: Pre-Application, Application and Mobilisation. The initial meeting was the start of the Pre-Application stage, and following a successful Application stage, GB Bank was granted its banking licence on 22 October 2021. This however was ‘Authorisation with Restrictions’, the bank was limited to only £50,000 of customer deposits, enough to test and validate its systems and processes through the final stage of Mobilisation.
On 16 August 2022, GB Bank exited the application process as a fully operational bank, launching to retail customers and commercial borrowers alike. The culmination of 5 years' work.
In the early years of the bank, my focus was on building out the technology by leveraging the billions invested in cloud-based financial technology (fintech). In December 2021, I stepped into the CEO role to steer the bank through Mobilisation and launch, straight into significant economic headwinds.
At that time, the conflict in Ukraine had been ongoing for 6 months, we found ourselves in a cost-of-living crisis, with rising energy costs, rising inflation, rising interest rates and in the construction industry, difficulties in the supply chain sourcing building supplies and materials such as bricks, ceramics and glass.
An immediate change in the bank’s business strategy was required, bringing forward commercial products and savings accounts that were planned for later years, building and launching each in a matter of weeks.
Adding to the pressure was the need for capital to grow the business. In January 2023, we engaged with several private equity firms to raise investment. By the end of February, we had secured a non-binding offer for tens of millions of pounds, however global events would impact us once again. In America, Silicon Valley Bank and others failed. In Europe, Credit Suisse failed. Banks were suddenly viewed as a much greater investment risk, and less of an opportunity. The offer of funding was withdrawn.
Weathering the storm, we had a good first full year of trading achieving £3M of income. Maintaining the belief that funding would come, always finding a way, we completed an £85M capital raise in May 2024 to secure the financial future of the bank.
Having successfully built, launched and secured the future, I felt it was then the right time to end my own GB Bank story, stepping down as CEO and leaving the business in November 2024, proud of the team and what had been achieved against all odds.
