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A new bank has launched in the UK to support SMEs to trade and grow, and provide them with working capital where the traditional banks are absent.

“I’m not a big fan of the word challenger bank.” If anything, Iain Hunter, CEO of Wyelands Bank, prefers the label “niche” to describe one the UK’s newest financial institutions.

Regardless of label, Wyelands is set to step in where established banks aren’t. Speaking to GTR at the bank’s new offices in Mayfair, Hunter and Wyelands’ head of origination David Locking outline their mission to create an industry-friendly bank for SMEs.

The bank was formerly known as Tungsten Bank, back when it was still owned by Tungsten Corporation. When Liberty House founder Sanjeev Gupta received the regulatory approval to acquire the bank in November last year, it was renamed to Wyelands (after the name of Gupta’s family home in South Wales).

Out came a new objective, new business plan, new board of directors, new people and even a new IT infrastructure. And, not least, new opportunities.

“Our views are very much driven on promoting and driving growth in SME businesses,” Hunter says. “We have a committed shareholder, we have a very clear vision of what we want to do and we are bringing new talent, and therefore we are seeing opportunities to really grow in the space we want to.”

Locking describes the past few months as a “reset” for the bank. He himself was among the many new faces brought in after the acquisition.

“Call it a start-up, call it what you want. It is something brand new. It’s quite exciting, and challenging,” he says.

While the bank will initially target UK manufacturing companies, ultimately the aim is to serve SMEs across various sectors. Most will likely be operating in the UK. “In the early days, our strategy is to leverage of the shareholder’s clients base and seek introductions to them, and then to build out a more externally-driven product offering and service solution,” Hunter says.

For a start, the deposit-taking bank will focus on receivables finance, enabling companies to free up working capital otherwise tied up in unpaid debts. “Receivables is where we started: we felt that that’s a very low-hanging fruit,” Locking says.

 

Growing to a “meaningful size”

As a small entity, they hope to be able to be more responsive to the needs of SMEs, when bigger banks are running slowly. Agile, nimble and flexible are just some of the keywords they use to describe Wyelands.

“It’s not right to say that all big banks don’t do SMEs,” Locking says. “But there are a number of companies that we are working with, who are struggling to get the same level of attention within those organisations, that we might otherwise provide. Big banks want minimum returns for client relationships. If you don’t meet that, in many cases you face a decision to be exited.”

He points out that while most of the bank’s clients still have other banking arrangements, they look to Wyelands for its particular product capability. “Our ability to move and change direction in response to requirements, as my experience is of small banks generally, is much better,” he says.

The niche approach is one they wish to continue. “We don’t want to be all things for all people, and there’s no point in us saying, here are 20 products today,” Hunter says. “So we start with one, we do it well, and then we move on to slightly adjacent field and want to keep doing that. And that is the longer-term vision.”

The bank also offers inventory, supply chain and trade finance solutions.

But the main selling point, they say, is the fact that Wyelands is solutions-focused and has a quick turnaround time.

“We are not here selling products; we are trying to understand who our clients are, what they do and what their needs are. And I think that resonates,” Locking says.

Hunter emphasises the team’s easy access to decision makers as “a critical ingredient”, making their processes quick.

Yet, despite being small, the bank is rapidly growing. According to Locking, it won’t be long before the bank’s asset book reaches £100mn. Employing 26 people today, Wyelands has already hired 10 new staff members since the turn of the year, and hopes to bring in 10-15 more by the end 2017.

Hunter says that in the long term, the aim is to build Wyelands into a bank “of meaningful size”.

“We want to grow with our clients,” Locking adds. “We’re not going about trying to capture a 10% market share in the UK. You may in two years’ time see that we have clients where we have three of four things on, as we build various parts of the platform. But our starting point is, where can we add value in the problem that they have. Let’s do that first.”