Digital challenger bank Tandem has signed a deal to acquire Harrods Bank, although details of the move are yet to be disclosed while regulators assess the deal.
Tandem’s entry into UK banking will see it benefit from an extra £80 million provided by the Qatari owners of Harrod’s Bank, helping it to contend with players such as Monzo and Atom.
The digital challenger intends to maintain the momentum gained from this deal, as it is targeting the launch of savings accounts before the year comes to a close.
Credit cards are also intended to be rolled out soon. Tandem currently offers an app that provides a service for managing personal finance.
Four months prior to the signing of this significant deal, Tandem experienced a period of serious instability after going through a funding deal collapse of £29 million when department store, House of Fraser, backed out of a £35 million funding deal.
Due to this major setback, a number of staff had to be laid off, and progress was damaged significantly as it also cost Tandem its banking license.
Tandem said in a blog post: “We’ve agreed a deal to acquire 100% of Harrods Bank, subject to regulatory approval, which brings around £80m of capital into the business… This means we can grow faster than ever, introducing as many people as possible to everything we’ve been building with our Co-Founder community. Together we’re going to continue our mission to create a new, better way of banking that has the customer at its focus.”
The blog post elaborated further on what the deal meant for the firm, it said: “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.”