Challenger bank Cynergy seeks £1bn valuation in minority sale

A challenger bank previously owned by Cyprus's biggest lender is in talks to sell a minority stake at a valuation of up to £1bn.

Sky News has learnt that Cynergy Bank, which specialises in lending to SMEs, has appointed Perella Weinberg Partners, the investment bank, to identify prospective new investors.

Spun out of Bank of Cyprus, Cynergy Bank has been trading under its current name since 2019.

It has been growing rapidly amid a slew of disrupters to enter the small business banking space since the last financial crisis.

Among Cynergy Bank's peers are Allica Bank, Oaknorth and Starling Bank.

To date, it has lent more than £4bn to business customers.

One source close to the minority sale process said the proceeds would be used in part to provide growth capital to the company, with existing shareholders also expected to take some money off the table.

Cynergy Capital, which bought the business from Bank of Cyprus for just over £100m, is backed by investors including Pradip Dhamecha (OBE), Balbinder Sohal, John Coulter and Ann Jones.

The bank is now likely to be valued at between £750m and £1bn in any new transaction, although insiders cautioned on Tuesday that a deal was not certain to be struck.

A formal investment process will get underway in September.

A spokesman for Cynergy Bank, which is the official banking partner of Premier League side Brentford, declined to comment.