An investment vehicle founded by the former Barclays chief Bob Diamond is weighing a deal that would catapult him back into the British retail banking sector after a five-year absence.
Sky News has learnt that Atlas Merchant Capital (AMC) is in discussions about buying a stake in Tandem Money, a financial services app aiming to compete with a plethora of new digital lenders.
If completed, it would be another milestone in Mr Diamond’s post-Barclays career, and would come months after AMC agreed to acquire Panmure Gordon, the venerable City stockbroker, in conjunction with its existing Qatari shareholders.
Mr Diamond is not thought to have taken a meaningful stake in any other UK retail banking franchise since his ousting as Barclays’ chief executive in the summer of 2012.
Having him invest through AMC in a platform such as Tandem would be a powerful statement of intent about the app’s ambitions.
However, sources close to the talks between AMC and Tandem said they were “very precarious”, with one putting the chances of a deal at “40-60 against”.
One insider said the two sides had been struggling to agree the terms of a deal, with AMC said to be looking to invest more than £10m as Tandem seeks to complete another substantial equity fundraising.
A decision is expected on whether an agreement might be reached in the coming days.
The talks are thought to have been triggered by a long-standing relationship between Matt Hansen, AMC’s head of UK and European investments, and Ricky Knox, the co-founder of Tandem.
There is also a Qatari connection between them given AMC’s cjoint-ownership of Panmure with investors from the Gulf state and Tandem’s tie-up with Harrods Bank.
Harrods Bank is owned by the Knightsbridge-based retailer, which itself is backed by one of Qatar’s sovereign wealth funds.
The sale to Tandem, which lost its UK banking licence earlier this year amid doubts about an investment from House of Fraser, has yet to be approved by regulators despite being announced in August.
Mr Knox said at the time of the announcement that the acquisition of Harrods Bank would accelerate its plans to offer savings accounts to customers.
Under the terms of the deal, Tandem would benefit from roughly £80m of capital being injected into the business as well as gaining control of Harrods Bank’s licence to take deposits.
The app, which had to drop the word ‘bank’ from its name following the loss of its licence, is said to be trying to finalise a fundraising within the next few weeks.
It was unclear this weekend which other potential investors it was talking to, either alongside or instead of Mr Diamond’s vehicle.
Tandem’s existing shareholders include the Omidyar Network, which was set up by the founder of eBay, and Route 66, a financial technology fund.
Mr Knox has also enlisted the backing of more than 11,000 ‘co-founders’ who have bought into his vision of “working in partnership with its customers to help them understand their money, make better decisions and access banking products and services that reward good behaviour rather than bad”.
For Mr Diamond, an investment by AMC in Tandem would place him in similar space to that of his successor at Barclays, Antony Jenkins, who has launched 10X Technologies, an infrastructure provider for digital banks.
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AMC has also put money into Credicom, a Greek lender, and Somerset Reinsurance, a Bermuda-registered reinsurer for the life insurance sector.
A spokesman for AMC declined to comment this weekend, while Tandem also declined to comment.