Bank of London announces £42 million in funding

In a statement, the specialist clearing bank, said the new capital was raised in August and would fund its next phase of growth

Fintech unicorn the Bank of London has announced a £42 million injection of funding today after a volatile week in which it was hit with a winding-up order and revealed its chief executive was stepping down.

In a statement, the specialist clearing bank, one of only two to be created in the UK in the past 250 years, said the new capital was raised in August and would fund its next phase of growth.

Luxembourg-based investor Mangrove Capital Partners led the round, the firm said.

It comes after the bank announced Tuesday that its founder and chief executive, Anthony Watson, would be stepping down from his role. City A.M. then revealed on Saturday that it had been hit with a winding-up order from HMRC, the UK’s tax authority.

A winding-up petition is a formal legal process used against a firm that has not paid its debts. It is commonly used by HMRC against firms that have failed to pay tax bills more than 21 days after a statutory demand and can result in their assets being forcibly sold.

The company claimed HMRC’s petition was down to a simple administrative handling delay due to an internal miscommunication and denied the departure of Watson was connected to the winding-up petition.

In a statement today, Watson’s replacement, Stephen Bell, said the fresh cash injection “underscores investor belief and confidence in our vision”.

Watson is staying with the bank in a new “founder & senior adviser” role and is still a non-executive director of its holding company. Bell was formerly chief risk and compliance officer.

Declining to comment on specific cases, an HMRC spokesperson said over the weekend: We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we have exhausted all other options, in order to protect taxpayers’ money.

Dan Neidle, former UK head of tax at law firm Clifford Chance and founder of think tank Tax Policy Associates, told City A.M. that the situation suggests major governance and administrative failings.

In its latest annual report, HMRC named The Bank of London as one of 11 UK banks that had chosen not to adopt its voluntary code of practice on taxation for the sector as of March 2023.

The code, introduced after the financial crisis and adopted by 316 banks, is designed to crack down on their potential use, promotion and funding of tax avoidance.

The group, valued at $1.1 billion in February 2023, previously tapped investors for £25 million last November.