Last year, I first spoke to Colin Digby, Global Head of Strategic Market Coverage at Crown Agents Bank. It was, and still is a bank in full development and because of its unique model, I was keen to hear how the company evolved over the past 12 months. And what a ride it has been. A year since our last discussion, the bank has seen significant developments, particularly in its regulatory status and market expansion efforts. Colin Digby shared insights into the bank’s evolving strategy and its focus on emerging markets.

Regulatory Milestones and Market Expansion

Crown Agents Bank has made significant progress in expanding its regulatory presence. Colin: "We want to emphasise that we are now a regulated business in Europe." The bank has obtained the status of a Payment Service Provider in Europe through De Nederlandsche Bank. This expansion is part of a broader international strategy that includes targeting regions such as Latin America, the Middle East, and Asia.

Colin stated, "Europe is phase one, and then we'll focus on other regions like LATAM, the Middle East, and Asia." Through partnerships with banks, fintechs, governments, central banks, and international development organisations, the bank specialises in foreign exchange (FX) and payments, connecting hard-to-reach markets to the global economy. This strategic expansion aims to establish a comprehensive international network in emerging markets, meeting the increasing demand for reliable financial services in these regions.

Crown Agents Bank started engaging in short-term lending from its London Office and is rapidly developing new products such as safeguarded client accounts that can yield higher balances. Digby explained, "We've developed that since we last spoke. We've also probably been a little bit more ambitious with our balance sheet thanks to those developments"

Becoming a Publicly Listed Company

One of the most significant developments for Crown Agents Bank has been its holding company’s – CAB Payments - transition to a publicly listed company. This move marks a new chapter in the bank’s history, bringing both opportunities and challenges. Digby commented on the implications of this change: "Obviously we listed since we last spoke. So, it's been an interesting rollercoaster."

Listing on the stock exchange has introduced new dynamics in how the bank operates. It now faces the expectations of shareholders and the need for more frequent and transparent reporting. Despite these pressures, the business's fundamentals remain strong.

Financial performance has been robust, with top-line revenue growing by 25% last year. Digby shared, "Top-line revenue grew 25% last year. We went from about 109 million in 2022 to closing out at about 137 million in 2023." This growth is a testament to the bank’s strategic initiatives and its ability to adapt to market conditions.

As Digby noted, "The fundamentals for our business haven't changed. They're still very strong. And the market for our core business is growing."

The public listing has also provided the bank with greater visibility and credibility in the financial market. It has enabled the bank to attract more clients and partners, particularly those seeking stability and governance rigor, which are crucial in the current economic environment.

Strategic Focus and Market Opportunities

Crown Agents Bank is strategically positioning itself to fill the void left by larger banks retreating from certain payment sectors. "There's almost a little bit of a void for partners who are going to be able to help do that, especially if you're a premium brand yourself," noted Digby. This focus on emerging markets and specialised services is seen as a key differentiator.

The bank’s core strength lies in its deep focus on payments and FX in emerging markets.

"We're very focused on the emerging market space... since we were acquired back in 2016, the focus has been very much on payments, small amounts of trade finance, but the core focus is on FX and payments into these emerging markets."

Future Prospects

Looking ahead, Crown Agents Bank is poised to continue its growth trajectory. The strategic initiatives, including the pursuit of a full banking license, product innovation, and expansion into new markets, are expected to drive further success. The bank’s ability to offer interest-bearing accounts, short-term lending, and other financial products will enhance its value proposition to clients.

Crown Agents Bank is navigating a period of significant growth and transformation. By capitalising on opportunities in emerging markets and expanding its regulatory footprint, the bank is well-positioned to deliver robust financial services and drive sustainable growth. As Digby succinctly put it, "The fundamentals for our business haven't changed. They're still very strong." This steadfast focus on core strengths and strategic expansion bodes well for the bank’s future in the dynamic financial landscape.