Radius Bank has been cutting ties to its labor heritage over the past year, forming new partnerships with financial technology startups and ditching its old name, First Trade Union Bank. Now Radius, started by and for local union carpenters, is about to sell itself to the ultimate capitalists: private equity firms.
This is an interesting strategy – and perhaps not as crazy as it sounds. The Boston Globe relates the sale of First Trade Union Bank (rebranded Radius Bank) to private equity, which intends to transform it into a pure digital bank, as well as a bank serving Fintech providers.
Since Radius is a tiny bank ($1bn assets), it faces the same issues as many of small community banks. It doesn’t seem that crazy therefore to focus on 1) digital and 2) serving Fintech startups. As I mentioned in a previous article, Fintechs such as Neo-Banks need an actual bank to operate, and Radius could be such a bank. This is for example what WebBank did with Lending Club.
For Radius, a very small bank under huge competitive and regulatory pressure, selling shovels in the Fintech gold rush might be an exciting opportunity…
Follow me on Twitter here