Harvey Schwartz and Peter Mandelson stop Bank of London board | USAEMALL.com

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Labour grandee Peter Mandelson and top US private equity boss Harvey Schwartz have left the board of the Bank of London, in the latest blow to the troubled fintech.

Mandelson and Schwartz, chief executive of the Carlyle Group, were the two most senior figures on the board of the bank’s holding company. Their involvement had helped to lend credibility to the start-up as it raised funding and embarked on a hiring spree.

The departure of the prominent political and finance figures is the latest setback for the bank, which is struggling to reposition itself after it was thrust into the spotlight in September by a winding-up order from UK tax authorities over unpaid debt.

HM Revenue & Customs later withdrew the petition but questions over TBOL’s financial health remained.

The Financial Times later reported that TBOL had told potential investors earlier this year that it had an “immediate” need to raise millions of pounds for regulatory capital. It also said it had prepared plans for a solvent wind-down in case the fundraising was not successful.

Schwartz, a former top executive at Goldman Sachs and one of the most recognisable names on Wall Street, has not made any public comments about the crisis at the bank despite serving as group chair.

TBOL founder Anthony Watson, who stepped down as chief executive in September, has also left the board of the holding company.

Watson has close ties to the Labour party and official records show that he has donated nearly £500,000 to the party and to individual politicians, including Home secretary Yvette Cooper, since 2015.

“These board changes reflect TBOL’s intention to align its leadership with its strategic direction,” the bank said.

The Bank of London also reiterated that it was undergoing a strategic realignment that led to a round of job cuts as it abandoned plans for a global expansion to focus on the UK market.

The bank last month announced it had raised £42mn in a fresh funding round that was led by existing investor and board member Mark Tluszcz.

The Bank of London had positioned itself as one of Britain’s most promising tech upstarts since receiving a banking licence from UK regulators in 2021, when it boasted of surpassing $1bn in valuation.

But it was hit by a series a of setbacks as it embarked on an expensive US expansion, which included taking up office space that was previously occupied by family office Archegos Capital Management, whose collapse cost several major banks billions of dollars.

“TBOL is strengthening compliance, risk management, and operational frameworks to provide reliable, resilient banking solutions for its UK clients,” a spokesperson for the bank said, adding that it was “taking a measured approach” to growth.