Digital lender OakNorth to be parent of US bank CUB | Money News

OakNorth, the British-based digital bank, will this week unveil a milestone US deal that will pave the way for it to launch a significant expansion on the other side of the Atlantic.

Sky News has learnt that OakNorth, which is chaired by the former City watchdog chair Lord Turner, will on Monday announce that it has agreed to acquire Community Unity Bank (CUB), which is based in Birmingham, Michigan, in an all-share deal.

The purchase price was unclear on Sunday, although one insider said it was likely to be valued in the tens of millions of dollars.

OakNorth declined to comment.

Launched in 2015, the bank is among a group of lenders – along with Monzo and Starling Bank – founded after the 2008 financial crisis.

Its backers include the giant Japanese investor SoftBank and GIC, the Singaporean state fund.

Since its launch, it has lent close to £12.5bn and boasts an industry-leading loan default ratio.

Last year, it paid out just over £30m to shareholders in its maiden dividend payment.

OakNorth has been growing rapidly, and this month said it had recorded pre-tax profits of £214.8m in 2024, up from £187.3m the previous year.

It made more than £2.1bn of new loans last year.

The acquisition of CUB, which launched just three years ago, is subject to regulatory approval, but follows authorisation of OakNorth by the Federal Reserve and the New York State Department of Financial Services for a Representative Office in New York last year.

OakNorth began lending in the US in 2023 and has since made $700m of loans, including to F1 Arcade and Ultimate Performance.