Bank of London: Peter Mandelson and Harvey Schwartz exit troubled fintech
The Bank of London has announced a slew of boardroom exits, including Labour grandee Peter Mandelson and ex-Goldman Sachs executive Harvey Schwartz, in the latest shake-up at the troubled fintech unicorn.
The bank said on Wednesday that Mandelson, Schwartz and Wade Davis had stepped down from the board of its holding company, as well as founder and ex-chief executive Anthony Watson.
Schwartz, CEO of private equity firm Carlyle, had been the company’s chair, while Mandelson was deputy chair.
The heavyweight appointments drew attention when Watson, a Labour donor, launched the start-up clearing bank in November 2021.
“These board changes reflect TBOL’s intention to align its leadership with its strategic direction,” The Bank of London said.
The news came alongside an announcement that the lossmaking bank would make a “strategic realignment to prioritise investment in its core UK market” following new investment this summer.
It said the restructuring would involve a strengthening of its compliance, risk management and operational frameworks “to provide reliable, resilient banking solutions for its UK clients”.
The Bank of London added that it was working to “increase efficiency and align resources”. It emerged last month that it was cutting jobs, including at executive level, as part of a restructuring demanded by investors.
The firm raised £42m in an August fundraise led by Mangrove Capital, run by Mark Tluszcz – who sits on The Bank of London’s holding company board.
It publicised the investment shortly after Morning Wire first reported that HMRC filed a winding-up petition against the holding company just two days after Watson stepped down as CEO to become a senior adviser.
The bank quickly resolved the tax issue but has faced heavy scrutiny over its governance and finances since the news broke. It tapped investors for an “immediate” cash injection in July to meet regulatory capital requirements.
This year alone, The Bank of London has lost its chief technology officer, chief operating officer, chief information security officer, and head of compliance and money laundering reporting.
Between April and July, two non-executive directors resigned from the bank’s board.
Watson, a former Barclays executive and LGBT campaigner, set up The Bank of London as a global clearing, agency and transaction bank for business customers.
It was only the second such firm to launch in the UK in 250 years, after fellow start-up ClearBank in 2017. The Bank of London was valued at $1.1bn in February 2023.
The Bank of London said that since the latest fundraising, its deposits had grown to surpass £800m.
Its latest accounts show the holding company’s pretax losses widened to £41.8m in 2022, from £15.7m in 2021. The bank recruited its first client last April.