The Cambridgeshire Local Government Pension Fund and Trinity Hall, a University of Cambridge college, have launched a private bank offering loans to Sipps and SSASs.
In December, Money Marketing revealed Sipp and SSAS banking firm Pensions Bank was in talks with the parties over a possible takeover deal.
Cambridge & Counties Bank has now been created after the acquisition of Pensions Bank received FSA approval. Deposits previously held in Pensions Bank have been transferred to the new company.
The bank will offer loan facilities to Sipps and SSASs secured against commercial property with terms of up to 20 years.
Loans will be to a maximum 50 per cent of the pre-borrowing fund value, and no more than 70 per cent LTV of the asset purchased.
The bank will also offer mainstream commercial mortgages to business owners and a range of retail and non-retail deposit accounts.
The Cambridgeshire Local Government Pension Fund and Trinity Hall each have a 50 per cent stake in the new venture.
Cambridge & Counties Bank chief executive Gary Wilkinson says: “There is a real need for increased competition in the banking sector.
“By placing a significant focus on developing a partnership type relationship with our clients through being easy to do business with and by focusing on plain English and transparency, we hope to have a significant impact on our markets.”
Treasury financial secretary Mark Hoban (pictured) says: “I am pleased to support a new bank that will focus on lending to the SMEs that make up such a vital part of the UK economy.
“The Government remains committed to fostering more diversity in the banking sector, so we need new banks to enter the market to provide consumers and businesses with greater choice.”