Teesside Pension Fund invests £20m in GBBwritten by Bella Palmer
GBB will fund around 20,000 homes and office space, and support over 100,000 jobs
The £5.3bn Teesside Pension Fund has invested £20m in GBB, a ground-breaking new bank with a mission to get ‘Britain and the regions building again’.
The investment comes at a good time for GBB, which recently announced it will headquarter its operations in Middlesbrough. An initial team of 60, growing to 120, will be based in the town’s purpose-built 2 Centre Square.
Currently a ‘bank in waiting’, GBB expects to secure its provisional banking licence later this Autumn when it will trade as GB Bank. Once formally up and running it expects to lend £385m in the North East to kick-start residential and commercial projects.
As GBB then expands across the North, Midlands and other parts of the UK, it aims to lend around £3bn over five years building a £1bn-plus balance sheet. It will fund around 20,000 homes and several million square feet of office space, along the way supporting the creation of well over 100,000 jobs.
Teesside Pension Fund has a mandate to invest £200m in local initiatives, and the fund’s committee voted to invest £20m in GBB.
Chair of the Teesside Pension Fund, Cllr David Coupe, said: It’s been a long-term aspiration of the fund to invest in an attractive and well-controlled local opportunity. It’s excellent that GBB will put down roots in Middlesbrough. They have a bold plan for the future, and it is excellent news that they will be based in the heart of our town centre.
He said, lots of companies are sadly at the mercy of COVID-19 uncertainty, but we’re confident investing in a robust, sector-specific digital start-up such as this is a strong way to maximise returns for the pension fund’s beneficiaries.
The bank will offer highly competitive fixed-rate savings and provide development finance. Secured property development loans of between £1m and £5m will be available, with 90% of lending supporting regional property developers, small and medium-sized businesses and construction companies.
Steve Deutsch, CEO of GBB, said: This is a landmark moment in our journey. Middlesbrough has a reputation as a hotbed for digital tech innovation, making it a natural fit. 2 Centre Square is a hugely impressive building and will make a great base for the team.
He said, the bank will meet a real need for SME commercial and residential property developers, as we’ll deliver the finance and relationship support that’s lacking at the moment.
Establishing a bank in the region benefits everyone, from the people we employ to the jobs created by the property developers we work with. We now have an excellent base, the investment that we need – the next stage is to secure our licence and have the full infrastructure in place ready to launch late 2021, Deutsch said.
Middlesbrough Mayor Andy Preston said: Middlesbrough’s becoming a much braver and more ambitious town. What we’re going to do is start challenging cities like Newcastle and Leeds for investment and success. Having a new bank based in the centre of Middlesbrough is the perfect statement of that new ambition and the first step to success.
He said, GBB is certainly going to be very successful, create jobs and win national attention, so that’s absolutely fantastic news for our town.
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