OakNorth funds almost £50m worth of deals post-Brexit

OakNorth funds almost £50m worth of deals post-Brexit




Challenger bank OakNorth has taken advantage of the uncertainty within the lending market by providing funding for close to £50m in deals.

Since the UK voted to leave the EU, OakNorth has closed deals including a £19m one with fast-food chain Leon, one worth £10.5m with SGS Hotels, as well as an undisclosed deal with the Indian restaurant chain Tamarind Collection.

The £19m deal with Leon will allow the business to open another 50 sites and hire an additional 1,000 people over the next four years.
 


Rishi with Leon CEO John Vincent 

Rishi Khosla, co-founder and chief executive of OakNorth, like many others, was initially shocked by the UK’s decision to leave the European Union back in June, but found that a number of deals presented themselves to OakNorth the day after the result.

“OakNorth had two leads come in as a direct result of larger banks pulling out of deals, and at a time when many banks are retrenching from the market, we’ve been able to close almost £50m in deals.” 

Rishi now believes that Brexit presents an opportunity to reform banking regulation and make it more proportional for new banks such as OakNorth.

“Currently, we have to adhere to the same regulatory requirement as larger banks, and hold significantly more capital than them, despite the fact that we pose no systemic risk. 

“Recent reports suggest that the Bank of England is considering easing capital requirements for smaller lenders in an effort to boost competition. 

“We hope this comes to fruition.”

Rishi added that an additional point on the regulatory side was the Funding for Lending Scheme that was extended to January 2018.

“By the time new banks like us have qualified to participate in the scheme, we’ll have a relatively short window to make the most of it. 

“Given all the good the scheme has done in enabling thousands more businesses to secure growth capital, it would be good to see it extended further.”

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