Castle Trust Capital plc has been advised that its application for a banking licence has been successful and has been approved by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

It submitted its application for a banking licence at the end of 2019.

Castle Trust is now authorised with restrictions as a bank and enters into a mobilisation period. During this period it will be required to undertake a number of actions (including the ‘Friends and Family’ testing of its new savings system) which have been agreed with the PRA and the FCA and are aimed at protecting both Castle Trust and its customers. Castle Trust says it is well advanced with the process and is aiming to apply for the restrictions on its deposit taking to be lifted in time for it to start to take deposits from the public later this Summer.

Castle Trust has also now commenced three Schemes of Arrangement pursuant to which it intends to convert its existing Fortress Bond and Housa customers into deposit holders following the lifting of its restrictions.

Martin Bischoff, Castle Trust’s CEO, said: “The granting of authorisation with restrictions marks an important moment in Castle Trust’s story.

“Our customers are at the heart of our drive to become a bank.  We already have 200,000 customers and by making the transition, we expect to be able to extend an enhanced offering to both them and future customers for whom we’ll be the bank of choice.”

Tim Hanford, managing director of J.C. Flowers & Co. Europe, Castle Trust’s majority shareholder, added: “We have seen Castle Trust develop from its inception in 2012, building its customer base and product propositions to the point where a banking licence became the obvious next step.

“The company’s strong performance and robust management have been demonstrated throughout, establishing a strong foundation for continuing its success as Castle Trust Bank.”

The company also announced the appointment of Richard Pym CBE as chair. Pym, an experienced financial services chair, was recently with AIB Group plc, where he chaired the company through the initial public offering in 2017 and led the board through the recovery from financial crisis.

Pym said: “I’m delighted to join Castle Trust.  The company is growing at pace and the granting of authorisation with restrictions heralds the start of great opportunities for the business to flourish.”