City of London Group Plc (LON:CIN) today announced that its subsidiary Recognise has received authorisation with restriction (AwR) (banking licence) from the PRA / FCA.

City of London Group sees the banking licence from the PRA / FCA as a major step in addressing the service gap for SMEs, particularly after the negative impacts of COVID-19. Recognise is well advanced in its readiness to meet mobilisation conditions that will lead to the removal of the deposit restriction, City of London Group says. It currently expects this could be as early as the end of the first quarter of 2021.

Phil Jenks, Chairman of Recognise said:

“As a new entrant in the UK SME banking market with no legacy book and the latest technology installed, Recognise is strongly placed to deliver on its relationship-based model and differentiated business plan. We have the experience and expertise at our disposal and believe we can play a major role in helping the UK small business sector get back on its feet.”

Michael Goldstein, Group CEO said:

“This represents a major milestone for the Group in delivering the strategy set out in early 2018. UK entrepreneurs will play a key role in creating and supporting UK economic growth, and to do so they need a banking sector that is aligned to their needs and way of thinking.”

To date COLG has had a twin strategy focused on Recognise, its SME lending business, and Milton Homes, its residential equity release business. In the light of the PRA/FCA’s authorisation with restriction, the COLG board has concluded that it will not start writing new business through Milton Homes and it will remain in permanent run-off.