Perenna, which is aiming to establish the UK’s first covered bond bank, has obtained a banking licence with restrictions from UK regulators the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA).
Perenna obtains banking licence
Once its banking infrastructure is in place and its banking restrictions have been lifted, the fintech mortgage lender intends to offer long-term fixed rate mortgages, as well a range of other mortgage products.
Utilising the covered bond market, it intends to “channel the trillions of pounds of insurance and pension monies into the UK real economy by improving the domestic capital markets”.
A covered bond is a debt security that is created from public sector loans or mortgage loans that are backed by a separate group of assets.
Perenna founder and CEO Arjan Verbeek says the UK’s financial infrastructure requires “significant innovation” to boost growth and reduce inequality.
Verbeek adds that Perenna will “support consumers with buying their first homes, moving home, supporting themselves in retirement and help the transition to net zero”.
Amid an ongoing housing crisis in the UK, Perenna says other countries have benefited from long-term fixed rate mortgages, which can be fixed for 30 years or more.
The firm adds its bank funding model will promote economic growth by “stimulating investment and increasing systemic stability” and getting first time buyers onto the housing ladder.
