U.K.-based digital bank Tandem Bank has bought Harrods Bank Ltd. from the upscale department store's Qatari owners, subject to regulatory approval, City A.M. reported Aug. 7.
Tandem founder Ricky Knox told the newspaper that the acquisition of the loss-making bank was expected to help the digital bank reach profitability more rapidly.
Tandem had expected to gain a full U.K. banking license earlier in 2017, but was forced to delay its plans after Sanpower, which owns retailer House of Fraser, backed out of a commitment to invest millions of pounds into the start-up. The acquisition of Harrods Bank will make Tandem the market's most mature digital challenger bank, according to the report, which noted that it will have a loan book of close to £200 million and deposits in excess of £300 million, in addition to picking up Harrods Bank's license.
Harrods is a U.K. department store owned by Qatar Holdings. Harrods Bank reported a full-year 2016 pretax loss of £8.4 million, widening from a loss of £4.9 million a year earlier, although net income grew to £2.3 million from £1.1 million.
Assuming the receipt of regulatory approval, Tandem will launch a review of Harrods Bank's products and staff, City A.M. wrote. The Harrods Bank brand will be eliminated.