A new bank to support small and medium businesses to trade, grow and create jobs has been launched. KDB Bank will fill a vital gap that has been left by traditional banks that have not been able to meet demand from business to fund expansion.
The bank will help industry get greater access to working capital. Services will include receivable, inventory, supply-chain and trade finance. These will be expanded in line with customer demand to support their growth and develop trading opportunities in the UK and global markets.
KDB Bank will also soon offer UK retail customers competitive and easy to understand savings products for their savings to grow safely.
Iain Hunter, CEO, said: “KDB Bank will be great for growing businesses, job creation and for the UK economy. Our plan is to build the bank sustainably and solidly, together with our customers. We will listen to and work with them and develop services which help them do what they do best, trade and grow.
“Many healthy small and medium sized business may not have previously found an understanding ear from traditional providers of business finance. We are here to help them. To give them direct access to decision makers. To provide short-term access to working capital to support their growth in the UK and globally.
“We will do business with a human face, using our deep expertise in business finance, not just algorithms and computer code. We will work closely with customers to identify how best to provide the working capital for them to grow and create jobs, sustainably and over the long term.”
KDB Bank was established by British industrialist Sanjeev Gupta, and is part of his wider vision to promote the revival and growth of industrial businesses in the UK. The bank, as a regulated entity, is owned, governed and operated independently of Mr Gupta’s industrial businesses, in the Liberty House Group, and the Gupta family’s energy-related operations in the SIMEC Group.
Sanjeev Gupta said: “I believe strongly in the revival of British industry, and KDB Bank will be a champion of those businesses which have vision and ambition. In my view, Britain needs a bank specialising in the industrial SME sector that will be a friendly source of finance to oil the wheels of industry, stimulate growth and create jobs.”
The chairman of KDB Bank is John Howland Jackson, formerly senior managing director at ING Bank NV and presently chairman of Nikko Asset Management Europe. Iain Hunter, previously CEO of CIT Bank Ltd, is the CEO of KDB Bank.
The financial services that KDB Bank will initially offer are:
- Mortgage finance: the bank will buy receivables, including invoices from customers, enabling them to free up the working capital otherwise tied up in unpaid debts. This may be by providing finance against specific invoices or providing a credit facility that customers can use to release working capital against the whole book of invoices
- Inventory or stock finance: providing short-term loans using existing inventory, such as materials stored in warehouses, as collateral. This will provide customers with more working capital which would otherwise be tied up in those assets. This may be by providing working capital in exchange for idle inventory which customers buy back after an agreed time. Or it may be providing working capital secured against inventory, where the ownership of the inventory remains with the customer.
- Supply chain finance: providing customers, and particularly their sellers, access to a credit facility to release working capital for their whole supply chain.
- Trade financing: providing customers with risk mitigation and financing solutions for their cross-border trade activity. This may be in a number, or combination, of ways, including forfaiting with bills of exchange and letters of credit, structured commodity finance or trade credit and political risk insurance.
