A new bank is aiming to launch in Newcastle with plans to lend £3bn over the next five years to boost housing and development in the “Northern Powerhouse”.

The management of GBB have applied for a banking licence and hope to be granted approval in the third quarter of 2020.

Chief executive Steve Deutsch was formerly in charge at Wesleyan for 13 years and prior to that he held various directorships at Lloyds.

GBB is aiming to cash in on growth from the launch of HS2 and provide finance to home owners, commercial developers and SME housebuilders across the region.

It aims to finance up to 25,000 new homes in an area which it says has been “starved of traditional bank funding and in desperate need of new houses”.

The bank says it will provide secured loans of £1-5m to experienced residential and commercial property developers and small construction businesses. 

GBB is in the process of raising £200m in phases.

The first tranche is to provide the initial regulatory capital required for the bank’s authorisation.

GBB will offer savers competitive fixed-rate savings products via a digital self-service platform.

Deutsch says: “There is a clear economic and political tail wind supporting the regeneration of the north of England. 

“The government has set out its unambiguous plan to rebalance the UK economy and we want to play a central part in that, helping the thousands of small businesses that have previously struggled to get the funding required to build the homes that people so desperately need. 

“GBB is a new and exciting lender that provides its customers and investors with a very compelling proposition at a time of acute need.”