CYBG, the holding company behind Yorkshire Bank and Virgin Money, has agreed a £400 million deal to fund loans through Salary Finance.
The FinTech group, whose founders include ex-Google UK managing director Dan Cobley, allows employees to take out loans that are then automatically repaid through their employer’s payroll system.
The company is backed by Blenheim Chalcot and counts the likes of Virgin Active, Dixons Carphone, L&G and many NHS trusts among its clients.
As part of the joint venture, CYBG will fund Salary Finance’s growing salary-deducted loans product line and has agreed to lend up to £400 million of personal loans. The deal remains subject to certain conditions and regulatory approval.
“The UK continues to be the driving force behind the global FinTech revolution that is putting people in control of their data and enabling them to change their lives for the better,” said Cobley
“This deal is another indication of the great strides Salary Finance has made through providing digital solutions to real-world problems.”
Salary Finance was founded in 2015 by Cobley and fellow co-founders Asesh Sarkar, a former banking consultant, and social entrepreneur Daniel Shakhani.
The business has been built in Blenheim Chalcot’s West London Venture Builder and received investment last year from Legal and General.
Sarkar, chief executive at Salary Finance, added: “Our flagship salary deducted loans product is a core part of our broader financial wellbeing platform and the funding joint venture with CYBG will enable us to continue to scale the product over the coming years.
“We are proud to work with a bank that demonstrates such openness to partnering with FinTech firms to create better outcomes in society.”
Salary Finance claims to reach more than a million employees across a variety of sectors, with household name clients in the UK including BT, E.ON, Virgin Active, Mitie, Capgemini, Carlsberg, Dixons Carphone, Saga and L&G.