CHALLENGER bank Shawbrook, chaired by Sir George Mathewson, has been valued at £725 million on its stock market debut.

The 75 million ordinary shares being issued into the market were priced at the upper end of the range at 290p.

The bank previously indicated it would float at somewhere between 255p and 305p.

Shawbrook, which specialises in lending to small and medium businesses, said it would raise gross proceeds of around £90m from the flotation.

Richard Pyman, chief executive, said: "Our focus remains on providing UK customers with a fresh, pragmatic approach to lending and savings whilst driving further growth by maximising opportunities in existing markets, capitalising on the embedded growth in our current loan book and developing a range of products to facilitate expansion into adjacent segments."

The 75-year-old Sir George, former chief executive and chairman at Royal Bank of Scotland, has indicated he will step down from the chairman role once a suitable successor has been found.

Shawbrook was formed in 2011 and is backed by Pollen Street Capital, which was previously the private equity arm of RBS.