One concern is that pre-referendum a UK challenger bank could access an (EU) market of ~500m people. Following the referendum, might be reduced to ~65m.”
In the wake of last month’s Brexit vote, banks on London’s Stock Exchange were some of the businesses hit by the fallout, and smaller challenger banks were hit hardest. These smaller groups like Metro Bank, Aldermore, Shawbrook and Virgin Money saw their share prices crumble by 30% on average as investors panicked about the impact of Brexit. Shares in these new banks were sold at a fraction of their previous price, triggered by their exposure to mortgage lending and small business lending, both of which could collapse if the economy declines. But what about the next wave of digital challenger banks that everyone’s excited about? How will Brexit impact groups like Mondo, Tandem, Atom Bank and Starling?