Wyelands Bank ordered by Bank of England to pay back all 4,000 savers

Around 4,000 savers will have £210million in cash returned to them after Wyelands Bank was ordered, in an unprecedented move by the Bank of England, to repay all of its depositors in full.

Holders of its 35 and 95-day notice accounts, which have paid zero interest after a succession of cuts, will be paid until the end of the notice period and savers who held fixed-rate accounts will be paid up to the end of their term.

Wyelands Bank was launched in 2017 by British steel magnate Sanjeev Gupta and racked up a £433million loan book funded by £726million in deposits from more than 15,000 savers by the end of April 2019, according to its latest accounts.

Steel tycoon Sanjeev Gupta founded Wyelands Bank in 2017 

But less than two years later it has become the first bank since the Bank of England’s PRA was launched in 2013 to be ordered to repay all its depositors. 

The number of savers has fallen by 11,000 since 2019 and its deposits by £516million since 2019. However, the amount held currently in the bank suggests £52,500 on average per depositor. 

Money raked in by Wyelands was described by the bank as ‘helping to support industrial growth and SME-sized businesses.’ 

It stopped taking deposits last year, having previously offered notice and fixed-rate deals both through its own website and through savings platforms like Raisin UK. 

It offered two, three, four and five-year fixed-rate bonds through Raisin but has not offered new deals on the platform for a long time.

Meanwhile, the last time its accounts were in the best buy tables was last spring, with the bank seemingly seeking to force out existing customers without attracting new deposits.

Wyelands will close all customer accounts by 24 March, it said on a statement on its website, with savers notified of the next steps on March 8.

‘Depositors do not need to take any action at this stage. The Bank has been working closely with its regulators regarding this repayment to depositors’, it said.

It insisted the bank was ‘solvent and has sufficient financial resources to meet all of its obligations and repay all depositors’, with Gupta announcing a £75million cash injection into the bank on Tuesday to help it pay back savers.

The bank, part of the ‘saviour of steel’s’ GFG Alliance, has reportedly drawn scrutiny from regulators after a February 2020 investigation by the Financial Times suggested much of the bank’s lending financed GFG companies.

Wyelands Bank said the closure of savers’ accounts was ‘a result of regulatory requirements applied by the PRA to Wyelands Bank’, which appears to be an unprecedented move by the regulator.

It marks the first time the Bank of England's PRA has ordered a bank to repay savers in full

It marks the first time the Bank of England’s PRA has ordered a bank to repay savers in full

The Bank of England said in a statement: ‘The PRA has been engaging closely with Wyelands Bank. The firm has the resources it needs to repay all depositors in full and we have required it to operationalise an orderly repayment of its deposits.’

The news also comes in a week in which Greensill Capital, an Australian firm advised by former Prime Minister David Cameron which helps finance GFG, has been plunged into financial difficulty and is seeking rescue funding.

A spokesman for the GFG Alliance told the Daily Mail on Thursday: ‘GFG Alliance has adequate funding for its current needs-and its refinancing plans to broaden its capital base and obtain longer-term funding are progressing well.’

James Blower, a savings analyst and founder of The Savings Guru, said: ‘Bank of England statement on Wyelands is incredibly short, which suggests to me there’s almost certainly more to come from the Wyelands affair.

‘For now, it’s clear that the Bank of England are no longer happy for Wyelands to continue to accept deposits.’

The bank was given a licence to take in retail cash four years ago, and is covered under the Financial Services Compensation Scheme – although there is no indication that this safety net will be needed at present.

This protects savers’ up to £85,000 per banking licence.  

The best notice account available is a 95-day notice account offered by smartphone app Moneybox through Investec, which can be opened with £1.

Meanwhile the best one-year fixed-rate is offered by OakNorth and pays 0.58 per cent, the best two-year by Cynergy Bank paying 0.75 per cent, the best three-year from the same provider paying 0.9 per cent and the best five-year from Shawbrook Bank paying 1.25 per cent.

Savings accounts

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