Virgin money has received the largest remaining prize from a contentious government-backed competition scheme, after earlier winners metro bank and nationwide were forced to give back more than 100m in grants.
Virgin received 35m from the capability and innovation fund, which is part of a 775m scheme being paid for by natwest, formerly royal bank of scotland, as a condition of its government bailout more than a decade ago.
Clearbank in partnership with tide received 25m, while santander-backed ebury and non-bank lender market finance each received 10m.
The awards were designed to help boost competition in the business banking market, but banking competition remedies, the independent body set up to manage the scheme, has been criticised for handing out cash based on unrealistic promises.
Metro bank was originally given 120m while it was mired in a reporting scandal, and handed back 50m after it was forced to slash its growth plans. the three biggest prize winners last year promised market share gains that would have required them to collectively acquire more than 100 per cent of available business for four of the next five years.
Virgin said on wednesday that the 35m award would allow it to reach a market share of more than 6 cent, the same level it previously hoped to reach with a much larger 120m prize.
Bcr said baringa partners, a consultancy, analysed the applications via a rigorous and detailed process.
Gavin opperman, virgin money business banking director, said the award was an endorsement of the groups potential to shake up sme banking and a vote of confidence in our ability to invest in new capabilities.
Clearbank and tide had already received 60m in the first round of awards in 2019. charles mcmanus, chief executive of clearbank, said the additional funding would allow it to have even more of an impact, building on the agility and efficiency we have shown so far.
However, one person who worked on a rival application said: i was surprised [clearbank] got another lot considering it was supposed to be about boosting the breadth of competition.
More than 60 companies applied for the latest grants.
Richard anderson, bcr chair, said: it has been difficult to narrow the awards down to a small number of outstanding winners and bcr looks forward to monitoring progress as they implement their programmes.