CashPlus boss: Expect to see challenger banks getting bought out

CashPlus CEO Rich Wagner (CashPlus CEO Rich Wagner)
CashPlus CEO Rich Wagner (CashPlus CEO Rich Wagner)

The boss of challenger bank Cashplus says to expect a wave of acquisitions in the space, including traditional lenders buying their online-first rivals, and that his firm has already seen interest.

Digital-led banks have taken off in the UK in recent years, with the FCA issuing many more banking licences to new challengers, creating a much more crowded space. CashPlus received its own banking licence in 2021.

CashPlus CEO Rich Wagner told the Standard that the number of online banks might soon come down as the sector begins to consolidate, and some firms will be bought out by their brick-and-mortar rivals.

“As we’ve seen the regulators opening up, you’re probably going to see some mergers and acquisitions over time,” Wagner said. “Even larger players are looking at merges. So it’s not just the digital banks that are likely to be merged together but also some of the traditional banks.”

He added that his own business isn’t specifically looking to be sold, but has noted interest from high-street banks.

“We’re not proactively doing anything but as the macro environment continues to move, but we’re not going to turn a blind eye to these type of opportunities,” Wagner said. “We’ve seen traditional lenders with an interest in our transactional products.”

It comes as CashPlus reported a record £52 million in revenue, while profit after tax grew to £5.5 million.

Wagner said: “I’m delighted with our performance for the year which saw us generate record revenues, grow in all core areas of the business and deliver a profit.

“These results underline the quality of our business and the ongoing demand for simple-to-use, easy-to-access banking products for the microbusinesses and consumers who are too often overlooked by the UK’s incumbent banks.”