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OakNorth, the digital lender backed by SoftBank, has appointed former City watchdog head Lord Adair Turner to the role of chair as it considers a stock market listing in London, the US or both.
Turner, who served as chair of the Financial Services Authority during the financial crisis, rejoins OakNorth after previously sitting on the board as senior independent director until 2017.
The appointment of Turner, who replaces outgoing chair Cyrus Ardalan, will add extensive regulatory experience to the board and comes as OakNorth considers plans for an initial public offering.
Rishi Khosla, co-founder and chief executive of OakNorth, told the Financial Times that Turner, who left the bank to focus on green initiatives, has had “a number of successes in the climate space” and has “extensive financial services experience”.
OakNorth, which launched in 2015 as a digital lender focused on small and medium-sized businesses, was most recently valued at $2.8bn in 2019 in a funding round led by Japanese conglomerate SoftBank’s Vision Fund, making it one of the UK’s most valuable fintechs. OakNorth turned a profit just over a year after it launched.
Khosla said OakNorth could list on the stock exchange in the future although the trading venue has yet to be decided.
“It’s something we may look at going forward,” he said. “In terms of which venue, when and if we decide to go public, we’ll evaluate the various options. We’re incredible proponents [of making the] UK a really strong place to scale businesses.”
He added: “Clearly the macro environment for a listing today is not attractive.”
Khosla said the bank was also looking at ways of listing on more than one exchange to access a bigger pool of investors. “One idea we have had . . . is how do you take the dual listing concept and create some type of flow between the London market and a market which has that depth of growth investors.”
London has suffered from a string of listed companies shifting to New York over the past year and was dealt a blow after Cambridge-based chipmaker Arm opted to float in the US earlier this year.
Khosla, a former Conservative party donor, said the “elephant in the room” was the lack of available growth capital in the UK, which he described as a “big gap” in London’s capital markets compared to the US.
“There’s a chicken and an egg issue there: you need the growth investors and you need the growth companies as well,” said Khosla. “Most companies on the London Stock Exchange aren’t growth companies and therefore there are not a lot of growth investors on the stock market.”
The UK bank, which typically lends between £500,000 and £25mn to businesses and property developers in the UK, posted pre-tax profits of £152mn in 2022, up from £134.5mn the previous year.
