British Business Investments Ltd, a commercial subsidiary of the British Business Bank, has announced a £30m subscription in specialist lender Shawbrook Group plc’s £75 million Tier 2 note issuance.
The subscription has been provided through BBI’s Investment Programme — which launched in 2013 – and will enable Shawbrook Bank to maintain an optimised capital structure to support growth in its chosen specialist SME markets.
The programme has been developed to increase the supply and diversity of finance for smaller businesses by expanding the lending capacity of challenger banks and non-bank lenders.
Since its launch in 2013, the Investment Programme has committed over £1.2bn to providers of finance to UK smaller businesses.
Judith Hartley, CEO at British Business Bank Investments, said: “Our second investment in Shawbrook Bank will continue to help support its growth trajectory, to the benefit of smaller businesses across the UK.
“This investment also demonstrates British Business Investments continued commitment to increase the diversity of supply of business finance.”
Dylan Minto, CFO at Shawbrook Bank, commented: “Establishing long-term relationships with investors is a priority for Shawbrook, and the strong and continued support shown by British Business Investments in our Tier 2 issue is testament to the bank’s track record as we shape our strategic intent to become the UK’s specialist SME lender of choice.
“I hope our relationship with the British Business Bank continues to strengthen as we grow our business and help more SMEs across the UK,” he added.
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The investment follows an original £30m subscription in 2015 to Shawbrook Bank’s previous Tier 2 note issuance, which has since been repaid.
The news comes after Shawbrook Bank recently released its 2020 half year report earlier last month.
The bank announced it has set aside £45.8 million of provisions in preparation for potential future loan impairments as a result of COVID-19.
It also reported it had granted £15.9k payment holidays to support its customers through the COVID-19 crisis, of which 10.8k remained in force at 30 July 2020.