Bank Of London Continues To Rebuild

ClearBank’s progress shows that modern clearing and banking infrastructure can become a sizeable and profitable business. Bank of London has strengthened its foundations. The question now is how much of that growing market it can capture when new customer onboarding resumes.

When I spoke with Bank of London chief executive Tony Bullman in June, one phrase stood out. The bank, he said, was “increasingly moving into execution”. After a period spent reshaping management, governance and technology, his argument was that the underlying proposition had not changed. Bank of London still intended to become the banking infrastructure behind a new generation of fintechs, payment businesses and other companies operating in the innovation economy.

Two months later, we have considerably more evidence with which to judge that claim. Bank of London has published its 2025 results, additional investment has been secured, technology spending is continuing and the senior leadership structure has been strengthened. At the same time, the performance of rival ClearBank provides perhaps the clearest indication yet that the market Bank of London wants to serve is both substantial and capable of producing profits.

That leaves Bank of London in an interesting position. It has clearly moved forward, but the biggest part of the journey remains ahead.

A Much Better Financial Direction

The improvement in Bank of London’s numbers is difficult to ignore.

Total income increased 77 per cent during 2025, from £3.6 million to £6.4 million. Net fee and commission income rose 143 per cent to £2.6 million, while net interest income increased 58 per cent to £4.1 million. At the same time, net operating expenses were cut by a third, falling from £50.1 million to £33.4 million.

That combination brought the pre-tax loss down from £46.5 million to £27 million. For a young bank investing heavily in technology, management and operational infrastructure, a £19.5 million reduction in losses in a single year represents material progress.

It is equally important not to get carried away with the percentage improvements. £6.4 million of annual income remains small against a £33.4 million operating cost base. Bank of London has made itself leaner and is generating more revenue, but it is still some distance from the scale required to produce sustainable profitability.

That is why the next stage matters more than the last.

Capital has also been strengthened. The bank reported CET1 capital of £18.4 million and a CET1 ratio of 173.23 per cent at the end of 2025. Since January this year, its ultimate parent has raised another £37 million from existing investors, with that money supporting the core banking migration, wider transformation programme and further operational investment.

In other words, the financial story has shifted. The immediate issue is no longer simply whether Bank of London can fund the rebuilding process. It is whether the rebuilt bank can now start producing the growth required to justify that investment.

The Market Is Providing An Answer

This is where ClearBank becomes useful.

The businesses are not identical and comparisons should be treated carefully. But ClearBank operates in many of the same areas that Bank of London considers strategically important, including clearing, embedded banking, agency banking, payments and services to fintech and financial institutions.

Its recent performance provides a strong indication of what can happen when this type of infrastructure business reaches scale.

ClearBank’s UK bank recorded its third consecutive year of profitability in 2025. UK normalised revenue reached £117.7 million, up 32 per cent, while pre-tax profit increased 53 per cent to £12.2 million.

The underlying operational numbers are perhaps even more revealing.

ClearBank ended 2025 with £17.8 billion in client deposits and 279 live clients. Payment scheme transaction volumes increased 57 per cent, with the bank processing 262 million payments during the year.

These are not simply impressive figures for ClearBank. They matter because they provide evidence for the central argument behind Bank of London.

There is a sizeable group of fintechs, payment companies and other financial businesses that do not necessarily want to build their own direct access to every piece of banking and payments infrastructure. They need accounts, safeguarding, clearing, settlement, payments, APIs and increasingly multi-currency capabilities. Providing that infrastructure can become a substantial business in its own right.

ClearBank has now demonstrated that in the UK.

Bank of London therefore does not have to convince investors that modern clearing infrastructure can eventually make money. The harder task is demonstrating that there is sufficient space for another specialist provider and that Bank of London’s model gives it a compelling reason to win part of that business.

A Different Proposition

Bullman was clear about what he believes provides that distinction when we spoke.

Bank of London operates a full-reserve model. It does not lend customer deposits. Client funds are held in full and unencumbered at the Bank of England, while revenue comes primarily from fees and deposit margins generated through clearing, payments, operating accounts, safeguarding accounts and related banking services.

That is quite different from the traditional commercial banking model where deposits are used to finance lending.

Bullman also pointed to direct clearing access, cloud-based infrastructure and an API-first model as important advantages. In his view, combining those characteristics with a full-reserve balance sheet creates a proposition particularly well suited to fintechs and other businesses that need banking infrastructure without wanting the complexity associated with a large incumbent bank.

The argument becomes more interesting as the market expands.

Payment companies are getting larger. Embedded finance continues to move banking products into non-bank platforms. Fintechs increasingly require safeguarding and operational accounts. Digital asset companies will need conventional banking relationships even if the assets they handle sit outside the banking system.

In our interview, Bullman specifically identified crypto exchanges, stablecoin issuers and digital asset platforms as potential future clients. His argument was not that Bank of London should trade or hold those assets itself, but that it could provide the traditional banking infrastructure sitting behind businesses operating in that market.

That is potentially significant. The opportunity is not limited to taking business away from existing clearing providers. The overall pool of companies requiring specialist banking infrastructure is itself expanding.

Technology Has To Keep Pace

The bank is spending accordingly.

Bank of London has chosen Thought Machine’s Vault Core as its next-generation core banking platform. It is also investing in its general ledger, API capabilities, straight-through processing, transaction monitoring and wider financial crime systems, including the implementation of LexisNexis technology.

There is an interesting contradiction here.

One of the attractions of building a new bank was supposed to be the absence of legacy technology. Yet only a few years after launch, Bank of London is already undertaking a major core platform migration.

I do not necessarily see that as a weakness. Technology businesses rarely stand still, and infrastructure that looked appropriate at launch may not be what is required at scale. In fact, being able to replace systems before they become embedded for 20 years may be precisely the advantage a smaller organisation has over an incumbent.

The test will be whether that investment produces something clients genuinely notice: quicker integration, broader products, lower friction and the ability to support much greater transaction volumes.

One Constraint Still Matters

There is, however, one obvious brake on this opportunity.

Bank of London is not currently onboarding new customers. The bank says it voluntarily paused onboarding in August 2025 while making enhancements to its financial crime prevention controls. That pause has since been formalised through an arrangement with the Financial Conduct Authority, although existing customer accounts and services continue to operate normally.

In May, Bank of London said the additional £37 million of investment would support the business as it worked towards resuming customer onboarding “in the coming months”. Its current website continues to invite prospective clients to register their interest, but confirms that onboarding has yet to restart.

This may ultimately prove to be the pivotal point in the turnaround.

Bullman told me in June that there was a steady stream of potential customers approaching the bank. If that interest is genuine, and if it has continued while onboarding has been paused, there could be pent-up commercial demand waiting when the restriction is lifted.

That does not guarantee success. Prospective clients can move elsewhere, competitors are expanding, and technology alone does not win banking relationships. But it does give Bank of London a potentially valuable opportunity to test whether the market interest Bullman described can be converted into meaningful revenue.

ClearBank Shows What Scale Could Look Like

The gap between Bank of London and ClearBank today is substantial.

One generated £6.4 million of income in 2025 and lost £27 million before tax. The other generated more than £117 million of UK normalised revenue and produced a £12.2 million pre-tax profit.

But that gap is also what makes the comparison useful.

ClearBank provides something close to a road map for what specialist banking infrastructure can become when deposits, clients and payment volumes begin to scale. Its 279 live clients and £17.8 billion of deposits demonstrate that this is not a niche serving a handful of start-ups.

For Bank of London, even winning a relatively small share of a market of that size could transform its economics.

That makes the next 12 to 24 months considerably more important than the last.

Bank of London has already done much of the less visible work. Costs have fallen. Capital has been strengthened. Management has changed. Governance and controls have received investment. The technology platform is being rebuilt for the next phase.

What it needs now is volume.

When I asked Bullman in June what he wanted the eventual Bank of London story to be, he talked about helping modernise payments infrastructure and supporting new businesses in the innovation economy with flexible and reliable banking.

That ambition looks no less relevant today. If anything, ClearBank’s performance suggests the market opportunity is becoming easier to see.

The difference is that Bank of London is now reaching the point where opportunity has to become execution.

It has rebuilt much of the bank. When the doors reopen fully to new customers, we will begin to find out how large a bank it can actually become.