A NEW bank – which the council is spending £30 million to buy a 33 per cent share in – has secured its banking licence.

Redwood Bank has secured a banking licence following approval from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).

The UK small and medium-sized enterprise (SME) business bank will now enter its mobilisation phase and expects to launch to customers later this year.

It will be owned by Redwood Financial Partners Ltd, a company controlled by Jonathan and David Rowland.

The authority's £30 million deal is the first time it has made an investment of this type.

The bank will offer secured SME lending products to owner occupied businesses, as well as to experienced commercial and residential property investors.

It will also provide business deposit accounts.

Following the council's investment, prior to launching, Redwood Bank will open a northern regional office in Warrington, which is being tipped to 'spearhead' lending to SMEs across the region.

It will be in addition to Redwood’s headquarters in Letchworth.

Cllr Russ Bowden, executive board member for corporate finance, said: "This is a really important deal for Warrington and part of our commitment to innovative financial approaches, which support growth and sustainability in the borough.

"We see our stake in the company as an investment in our future.

"It's about investing in our economy, helping businesses thrive and generating income, which will enable us to protect council services.

"I'm delighted that the company has now been granted its banking licence and we can move forward towards its launch."

Jonathan Rowland, co-founder of the bank, added: "Securing a banking licence by the PRA and the FCA underlines the strength of our business model and the calibre of our experienced management team.

"With the opportunities being created by Brexit and the financial services sector's rehabilitation, this is a great time to be entering the market.

"We extend a warm welcome to Warrington Borough Council as a new shareholder in Redwood.

"It's clear that the council shares our vision to create a robust, secure and profitable bank that is not only well placed to deliver strong returns but also to stimulate sustainable economic growth in Warrington and the surrounding area.

"This is a unique public-private partnership that heralds a return to community banking in the UK."

Redwood will be announcing a number of senior board-level management appointments over the coming weeks.