18th Aug 2020 14:03
(Alliance News) - Investment firm City of London Group PLC on Tuesday reported a widened annual loss as it continued to progress its UK banking licence application for subsidiary Recognise Financial Services Ltd.
Revenue for the year to March 31 was GBP7.1 million, down from GBP7.5 million the year before. Its pretax loss stretched to GBP9.7 million from GBP3.5 million a year ago.
The firm took GBP3.4 million in costs as it progressed a UK banking licence for subsidiary Recognise, double the GBP1.7 million in costs for this a year before, while provisions for bad debt increased to GBP1.6 million from just GBP282,000.
City of London Group said that, subject to the successful outcome of talks on a fundraise and regulatory approval, it is well-placed to achieve its objective of Recognise being granted a full UK banking licence by the Bank of England's Prudential Regulatory Authority in the first half of 2021.
"Having received its Total Capital Requirements letter in July 2020, which sets out the PRA's capital and liquidity requirements, the next step towards completing Recognise's journey to becoming a bank will be to receive formal [Authorisation with Restriction] from the PRA, and we believe that this is very close," said Chief Executive Michael Goldstein.
He added: "We are currently in advanced discussions with a third party on a fund raise. Subject to the successful conclusion of these discussions and shareholder approval, as well as meeting any final regulatory requirements, the funds raised will be used to provide capital for Recognise to move to a full licence by the first half of 2021 and support its short-term lending activities."
Shares in City of London Group were down 14% at 67.00 pence in London on Tuesday.
By Lucy Heming;Â [email protected]
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