Geoff Miller, who last year announced he was looking into the possibility of establishing a new bank in Guernsey, has revealed that he and two business partners had sought for several months to acquire Permanent Bank International, the Isle of Man bank which, as reported here yesterday, is being wound down.
In an interview, Miller said he had just returned from the Isle of Man this morning, after having made a last-ditch attempt to try to convince the bank to agree to a sale to Select Finance Investments, a company he and two associates, Marc Krombach and Jeremy Stubbs, had formed in order to establish locally-owned banking institutions in jurisdictions like the Isle of Man and Guernsey, which have seen an exodus of banks in recent years.
“To find out on Wednesday that a decision has been made to close the bank was somewhat of a surprise, as well as a disappointment,” he says.
“Whilst we appreciate that we are a relatively new business, the team has many decades of financial services experience, and our plans and approach have been positively received by both the Isle of Man government and investors.
“The Isle of Man banking industry has been dealt blow after blow [by the loss of its banks], and here was a potential opportunity for a well-established bank – employing 12 people, with many local customers – to be sold to new owners, who were committed to significant further investment to create the headquarters of a bank serving the Crown Dependencies.”
Miller says the Isle of Man is currently served by just eight banking groups, of which four are the “big UK clearers” like HSBC and RBS; and of the remaining four, only Conister Bank is locally owned and run.
Had he and his partners been able to acquire Permanent Bank International, Miller says, they would have looked to expand it to other jurisdictions in need of banking, such as Guernsey, and to list it on the Guernsey-based International Stock Exchange, rebranded in February from the Channel Islands Securities Exchange.
Winding down through 2017
The news that Permanent Bank International is to be wound down over the next several months was announced on Wednesday by its Dublin-based, Irish Stock Exchange-listed parent, Permanent TSB Group Holdings. It said it had come to the decision after concluding a strategic review of its operations.
PBI had been created in 2011 by the acquisition of Irish Nationwide (IoM) by Irish Life & Permanent, which ultimately became Permanent TSB Group Holdings, following further changes that occurred in the wake of the financial crisis, which hit Ireland’s banking sector particularly hard.
Permanent TSB Group spokespeople didn’t immediately reply to a request for comment.
Finance for Guernsey
Last year, Miller established another business venture, Finance for Guernsey, to research the market potential for a new, Guernsey-owned and run banking entity, with the intention of then putting together a business capable of accommodating whatever market demand was found to exist. He says this work is continuing, following the determination that there is indeed a need for more and better banking options on the island.
In the meantime, however, Miller says he was approached in November by the Isle of Man government, which in August of last year, as reported, had made significant changes to its banking regulatory framework, with the aim of expanding the IoM’s non-retail banking sector.
“We first met them [Isle of Man government officials] at the end of last year, and have been in the Isle of Man on an almost weekly basis since then to progress a number of potential models, engage with prospective stakeholders and to speak to the government about their various programmes to assist businesses moving to the island,” Miller said.
Miller told International Investment that he and his partners will continue to with plans to obtain an Isle of Man banking licence (“Class 1 (2) non-retail/restricted deposit takers”) that will enable them to set up an institution that would cater for corporate clients, such as fiduciary and corporate services businesses.
But he says he continues to believe that for Permanent Bank International, its customers and the Isle of Man, a sale to Select Finance Investments would have been a better option than winding the bank down.
“While I appreciate that Permanent Bank had never said it was up for sale, it is considerably more work to close a bank down than sell it,” Miller says.
“Here was an opportunity for Permanent TSB to exit the Isle of Man whilst saving jobs, creating an exciting new future for an ex-subsidiary, and without a further negative impact on an already suffering industry.
“It’s very disappointing for us and for the people of the Isle of Man but we will continue with our plans to develop a solution for banking products across the Crown Dependencies.”
Miller’s background includes numerous non-executive directorships and executive roles over the past decade, including having been the chairman, until December 2015, of GLI Finance Ltd, a Guernsey-based, AIM-listed provider of alternative financing for SME companies. A native Londoner, he settled in Guernsey five years ago after stints in Singapore and Moscow.
He has described “developing the alternative finance market globally” as his “passion”.