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Neobank Masthaven to close UK business, puts loan book up for sale

Just six years after winning its banking license in the UK, Masthaven is shutting its doors.

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Masthaven Bank, a former non-bank lender turned neobank, is withdrawing from the UK banking market.

Founded as a non-bank lender in 2004, Masthaven won its banking licence in 2016. It will slowly withdraw over the next two years, however, and plans to sell its long-term and short-term loan books and return all savings deposits to customers. 

New loan originations are ceasing although it will continue to process existing applications. Its mortgage book will be sold through a tender process, expected to be finished in 2022.

Leigh Bartlett, Masthaven Bank’s CEO says the decision was “strategic” and the bank is “well-funded and has sufficient capital and liquidity” to repay savings customers in an orderly fashion by the end of 2023

“We have conducted a comprehensive strategic review of the business, with the support of specialist advisers, to consider how we could achieve our ambitions to grow the bank.

“We assessed a range of options, but all of them required a significant commitment of long-term capital and we have not been able to secure the level of investment necessary to grow the bank while serving our customers efficiently and effectively.

“I’m very proud of what the team has achieved in what is a very competitive UK banking market and I recognise this news will come as a shock and disappointment to colleagues, customers, intermediaries, and others. We will do everything we can to answer their questions and address their concerns over the coming weeks. 

Masthaven also said in a statement that the UK banking regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are aware of the bank’s plans and its wind-down plan. 

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