By Joe Hoppe

NatWest Group PLC said Thursday that it has entered into a strategic partnership with the Vodeno Group to create a banking-as-a-service group in the U.K.

The U.K. bank said the partnership with the European banking-as-a-service company will enable businesses to embed financial services like payments, deposits, point-of-sale credit and merchant cash advances directly into their ecosystems.

The new U.K. entity will be 82% owned and consolidated by National Westminster Bank PLC, with Vodeno TechCo holding the remaining minority interest.

NatWest Group will also take a minority interest in Vodeno Ltd., which fully owns Vodeno TechCo and Aion. It will begin with a 9.9% holding, increasing to 18% subject to certain conditions and approvals.

NatWest said it will make a capped commitment of around 115 million pounds ($129 million) to establish the entity and a 58 million-euro ($56.7 million) investment in Vodeno to acquire an 18% minority stake, in each case subject to certain conditions and approvals.

"This strategic partnership presents a strong potential source of fee income in a growing market, and an opportunity to deliver sustainable growth by building deeper relationships with our corporate customers," Chief Executive Alison Rose said.

Shares at 0815 GMT were up 0.8 pence, or 0.4% at 232.1 pence.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

October 20, 2022 04:38 ET (08:38 GMT)

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