Digital challenger bank Tandem is to acquire Harrods Bank, founded by the upmarket London department store in 1893 and which offers savings, mortgages, gold bullion and money transfers.
The deal gives the four-year-old fintech startup instant access to a range of financial products, a banking licence and revenue, with the Harrods Bank brand expected to disappear assuming that the proposed deal wins regulatory approval. It comes five months after Tandem failed to meet the Bank of England’s (BoE) requirement for a full banking licence, which resulted when a promised £29m investment from China’s Sanpower Group was dropped. Sanpower bought the UK’s House of Fraser department store chain in 2014.
Harrods’ owner Qatar Holdings was reported earlier this year to be considering a sale of its bank, whose pre-tax losses grew to £8.4m last year from £4.9m in 2015 despite net income doubling from £1.1m to £2.3m.
A blog issued by Tandem to announce the deal read: “We can accelerate our launch plans and start offering savings accounts soon. We will continue developing and rolling out our app and credit card as planned, with a little more spring in our step. When the deal is finalised, we’ll operate the whole business under the Tandem brand.”