A window reflects a Royal Bank of Scotland Group Plc (RBS) logo at a bank branch in London, U.K., on Friday, Feb. 23, 2018. RBS swung to its first full-year profit in a decade, but the delay in settling with the U.S. Department of Justice over a mortgage-securities probe and rising restructuring costs are casting a shadow on any celebrations. Photographer: Simon Dawson/Bloomberg
© Bloomberg

British fintech Loot has fallen into administration less than six months after it secured an investment from Royal Bank of Scotland, after the state-owned bank backed out of a potential deal to buy the whole company.

Loot was forced to call in Smith & Williamson on Wednesday after efforts to raise fresh investment failed last week. However, Henry Shinners, one of the joint administrators, said they were already in “advanced negotiations” with a potential buyer that could take over Loot’s services.

Mr Shinners said a deal could be finalised “within days”, preventing any disruption to Loot’s more than 200,000 customers.

The five year-old company did not have a full banking licence, but offered a current account and pre-paid debit card with controls and spending insights designed to help young people save. All customer deposits will be protected regardless of the outcome of negotiations.

RBS took a 25 per cent stake in Loot over two rounds of investment in 2018 and early this year, investing £5m into the company. Other early investors included Rocket Internet’s investing arm GFC.

RBS later made an indicative bid to buy the business, but decided not to proceed after carrying out due diligence, according to a person briefed on the process.

Loot searched for alternative sources of investment, including encouraging customers to register their interest for a crowdfunding round, but failed to secure a deal before it ran out of funding.

RBS’s investment was tied to Bó, the standalone digital bank that it plans to open later this year. Bó shares Loot’s focus on using data analysis to help customers save money. It is one of a number of digital projects the bank is working on in an effort to adapt to changing customer habits and the growth of fintech rivals such as Monzo and Revolut.

Ross McEwan, RBS’ outgoing chief executive, has previously acknowledged that not all of the company’s new projects would be successful, but said even the failed experiments would help it to improve its core businesses. RBS declined to comment.

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