In April, Castle Trust announced that it had entered discussions with the PRA and FCA as it looked to pursue a banking licence application.

At the time, the lender stated that it hoped the move into banking would support the continued evolution of the business and allow it to expand its product offering across the mortgage, savings and consumer finance arms.

“The first point to make is that the application for a banking licence won’t change our existing direction,” Barry explained.

He confirmed that Castle Trust would continue to offer first and second charge bridging loans and medium-term finance to buy-to-let investors, expats, foreign nationals and high-net-worth individuals.

“What a banking licence would give us is more diversity in our funding and this is something that any forward-thinking lender should be looking to achieve.”

Barry added that Castle Trust would “absolutely” stay in the specialist finance market as a bank and would continue to deliver and enhance its offering.

“We operate in a competitive environment, but there is still plenty of opportunity as we expect an increasing number of landlords to turn to more complex investments like HMOs, multi units, holiday lets and student accommodation as they investigate new ways to deliver better yields.

“With growing numbers of new businesses, we also anticipate more appetite from entrepreneurs who want to tap into the equity in their property to invest in their business, and the demand for development funding will only continue to rise as smaller developers are being encouraged to help solve our housing shortage.

“We are currently getting a lot of business by providing a development exit.”

He noted that applying for a banking licence was a serious undertaking and should not be taken lightly.

“We believe that if Castle Trust [was] to become a bank, [it] would be in a strong position as [it] already [has] a track record of holding customer money and providing innovative lending solutions.

“Delivering an effective, customer-focused combination of these functions requires a huge amount of experience and expertise and we are fortunate enough to already have these in abundance within the business.”