Castle Trust invited to apply for a banking licence

In April 2018 Castle Trust announced its intention to become a bank. Since then, we’ve been working closely with both UK regulators, the Prudential Regulation Authority and the Financial Conduct Authority, on our banking licence application. We are pleased to let you know that we were recently invited to submit our application, which we submitted in early September 2019.

This is a natural next step in our journey that started with our customers investing with us when we were founded in 2012. Since then, with our customers' help, we’ve steadily grown and now more than 22,000 customers trust us to look after their money. Becoming a bank is an exciting milestone but it won’t change our focus on doing what’s right for our customers. In fact, it means we’ll be able to offer a broader range of products in the future.

We've always been proud to be different, and now we're starting the process of becoming a different kind of bank. We look forward to embarking on this exciting journey with our customers.

We have put together a Question & Answer section to help answer some questions our customers may have:

When will Castle Trust become a bank?

The regulators, the Prudential Regulation Authority and the Financial Conduct Authority, are currently reviewing our application. They typically take around six months to make a decision, so, assuming our application follows the standard timeline, we expect to become a bank in spring 2020. We’ll let you know the result when we hear back from them.

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Why is Castle Trust becoming a bank?

Castle Trust was founded in 2012 to provide innovative products to both savers and borrowers and has steadily grown over time. Our current status as an investment firm limits the range of products that we can offer and it is a natural next step for us to become a bank as we look to broaden our product range and better meet our customers’ needs.

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What products will Castle Trust offer in the future?

As well as continuing to offer fixed term products as we do today, becoming a bank will enable us to launch a competitive instant access account. We’re very excited about this and we’ll provide you with more information about our new products once we’re a bank.

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What do I need to do now?

There is nothing you need to do now. We’ll keep you updated with our progress.

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What happens to my existing Fortress Bond when Castle Trust becomes a bank?

Your existing Fortress Bond will continue to pay the same interest rate and run for the same term. We‘ll consult with customers on the opportunity to have Fortress Bonds reclassified as bank deposits, still paying the same interest rate and still maturing on the same date. Our current plan is that this would be implemented by what is called a ‘Scheme of Arrangement’, which is a proposal put forward by us that would require the approval of the Courts and a positive vote in favour by Fortress Bond holders. We’ll explain the process for doing this closer to the time we become a bank.

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What is the difference between a bank deposit and a Fortress Bond?

In short, a bank deposit is money held in an account, such as a savings account, offered by a bank. A Fortress Bond is an investment (fixed rate bond) that pays interest to investors in a lump sum, either quarterly or at maturity, and returns the original amount invested at the end of the term. If you’re interested in the technical side, you can find out more information on our website about how Castle Trust issues Fortress Bonds.

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What will happen to rates when Castle Trust becomes a bank?

Existing Fortress Bonds will continue to pay the same rates of interest. As we launch new products, we’ll continue to review the market to ensure that the rates on our products remain competitive.

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Can I continue to invest with Castle Trust?

Yes, you can continue to make new investments in the normal way by post, by phone and online on our Investments Information page.

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I have a Fortress Bond coming up to maturity – can I reinvest it?

Yes, we’ll contact you before maturity in the normal way so you can provide us with instructions on whether you want to reinvest, part-invest or withdraw your funds.

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How is Castle Trust performing at the moment?

We’re pleased with the performance of the business to date, which is why we believe this is a good time for us to make this journey towards becoming a bank. You can find information about our latest financial performance on our website. In the six months to March 2019, we made a profit after tax of £1.2m. Our next financial statements will be published in January 2020.

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Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Your home may be repossessed if you do not keep up repayments on your mortgage. Loans are subject to status, terms and conditions. This website is for information purposes only. If you are in any doubt regarding suitability of our products please seek advice from an accredited independent mortgage adviser.

You risk losing capital should Castle Trust become insolvent.

Castle Trust is the trading name of both Castle Trust Capital plc (company number 07454474) and Castle Trust Capital Management Limited (company number 07504954). Castle Trust is authorised and regulated by the Financial Conduct Authority, under reference numbers 541910 and 541893. Registered office: 10 Norwich Street, London, EC4A 1BD. Registered in England and Wales.

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