Masthaven has announced that it will exit the UK banking market over the next two years.

The non-bank  lender has confirmed that it will sell its mortgage book through a tender process, expected to conclude this year.

The decision to withdraw from the UK was made as the bank has been unable to secure the long-term capital investment it needs to run effectively.

Masthaven was founded as a non-bank lender in 2004 and acquired a banking licence in 2016. All associated employees, intermediaries and stakeholders are learning the news today.

The lender will reduce and ultimately sell its long-term and short-term loan books and return all savings deposits to customers. It says it is well-funded and has sufficient capital and liquidity to repay savings customers in an orderly fashion by the end of 2023, on or before contractual maturity dates.

Masthaven Bank chief executive Leigh Bartlett says: “We have conducted a comprehensive strategic review of the business, with the support of specialist advisers, to consider how we could achieve our ambitions to grow the bank.

“We assessed a range of options, but all of them required a significant commitment of long-term capital and we have not been able to secure the level of investment necessary to grow the bank while serving our customers efficiently and effectively.

“I’m very proud of what the team has achieved in what is a very competitive UK banking market and  I recognise this news will come as a shock and disappointment to colleagues, customers, intermediaries, and others. We will do everything we can to answer their questions and address their concerns over the coming weeks.

“I must stress that this was a strategic decision, and we are working to a detailed plan which will be implemented carefully over the next two years.”

In a note to brokers, the bank confirmed that all mortgage and bridging products will be withdrawn from sale tomorrow (2 February), with the 4 February the deadline for accepted mortgage and bridging decisions in principle.