Liberty House’s Sanjeev Gupta to set up new bank

Liberty House bought Tungsten Bank from US-based invoice discounting company Tungsten Network in ­December last year for £30 million and is waiting for a licence from the Bank of England to operate it.

If Sanjeev Gupta’s attempt to transform the fate of the UK’s steel industry does not seem ambitious enough, he also has plans to challenge the country’s banking hegemony.

Liberty House bought Tungsten Bank from US-based invoice discounting company Tungsten Network in December last year for £30 million (Dh144.87m) and is waiting for a licence from the Bank of England to operate it, which he expects will be granted this year.

The plan for that business, which will be run independently from other investments, is to target the same UK midmarket industrial companies that he believes have largely been ignored by incumbent banks.

He cites Caparo Industries, a UK engineering group bought from administrators last year and subsequently rebranded as Liberty Engineering, as an example.

“Caparo was a profitable business, it was making money even when it went into administration. At its worst time it made £10m. So there was no reason for that business to fail. The core reason why it was failed was because it had bad cash flow, and it wasn’t supported by the banks.”

He said that UK banks are good at supporting large corporates and retail customers, but not mid-market companies.

He also believes there are opportunities in commodities banking, as some of the biggest players in that market have sought to reduce their exposure. “There’s a churn going on in the commodity world as well. There are clear opportunities within that to have a challenger bank,” he said.

This is not just in the UK. Mr Gupta said that he would like to get into the UAE banking sector, although the company would probably serve a different niche than the engineering companies it is targeting in the UK.

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