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CYBG enters personal lending joint venture with Salary Finance

By Josh White

Date: Tuesday 12 Feb 2019

CYBG enters personal lending joint venture with Salary Finance

(Sharecast News) - CYBG announced on Tuesday that its wholly-owned subsidiary Clydesdale Bank had entered into a joint venture with Salary Finance, to add an "innovative channel" to its personal lending business.
The FTSE 250 banking group described Salary Finance as an "innovative" financial technology platform, which connected to the payroll of participating employers to provide financial wellbeing benefits to employees, including salary-deducted savings and loans, as well as financial education.

It said Salary Finance would provide the joint venture with all of the services required for its business, including loan origination and management, marketing, cash management and other corporate services.

The venture would be complementary to CYBG's existing product plans, and would provide an incremental opportunity to develop the group's unsecured loan business within risk appetite.

"We're delighted to be expanding our lending proposition into new areas through this new joint venture with Salary Finance," said CYBG chief executive officer David Duffy.

"We have been hugely impressed by the Salary Finance team and the clear social purpose underpinning everything they do and we are delighted to be able to support the growth of this innovative platform.

"The Joint Venture adds to CYBG's growing range of partnerships - with over 40% of UK consumers regularly using fintech services, there is clear value in partnering with innovative new providers like Salary Finance."

Clydesdale Bank and Salary Finance would each acquire a 50% stake in the joint venture, in return for an initial cash consideration of £0.5m each.

CYBG said Clydesdale would provide a six-month rolling credit facility to the venture, subject to ongoing fulfilment of its business plan.

The debt funding provided by Clydesdale under the credit facility would be for an initial total commitment of approximately £100m, and could increase, subject to approval of the joint venture's total funding requirement by both Clydesdale and Salary Finance.


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