New UK clearing bank launches with $1bn valuation

A new clearing bank, The Bank of London, has launched today with a funding round giving it a $1.1 billion valuation.

The new bank will be the sixth principal clearing bank in the UK, and the second new clearing bank in over 250 years.

The bank joins Barclays, HSBC, Lloyds Banking Group, and NatWest - who have dominated the clearing space for decades - and challenger bank ClearBank which launched in 2017.

The bank - founded by Anthony Watson, former chief information officer at Nike and Barclays, said it has raised $120 million to date, with $90 million in this round.

The financing was led by ForgeLight, with a follow-on investment from 14W Venture Partners and Mangrove Capital Partners, with further additional investment committed over 18 months according to the bank.

The new company said it is in advanced talks with regulators in the European Union and North America as part of its growth strategy.

In addition, the bank said it is on track to hire over 3,000 people across the UK, EU, and North America over the next five years, with most of these hires being made in the UK.

"The Bank of London is going to address an arcane part of the global financial system – the sleepy worlds of clearing and global transaction banking,” said Harvey Schwartz, group chairperson of The Bank of London. “I was honoured to spend 21 years of my career at one of the leading financial institutions, retiring from Goldman Sachs in 2018 as president and co-chief operating officer.”

He added: “During the great financial crisis, I saw first-hand how the legacy payments, clearing and settlement processes that are at the heart of the global financial system contributed to bringing the world's economies to their knees, through their inefficiencies and inherent liquidity risk."

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