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Banking with a different approach

CFO Danesh Mahadeva explains to Peter Taylor-Whiffen why Sharia-compliant Gatehouse Bank is attracting so many customers and staff – of all faiths.

Being part of building something, establishing a different way of doing business, that’s the most exciting part of my job,” says Danesh Mahadeva, chief financial officer of Gatehouse Bank. “Banking still struggles with its reputation. There’s a real opportunity for someone to come in and offer something fresh and different – and that’s what we do.”

At 35, Mahadeva is young for a bank CFO, but seems perfectly to embody the spirit and energy of his employer. Gatehouse Bank is itself youthful, having been founded just 12 years ago – but is gaining traction as an alternative to the established sector. “We have three core values, responsible, open and can-do,” he says. “We take a personal approach to getting things done and that is striking a chord with customers.” The bank’s values differ because the approach is, ironically, built on ancient traditions – it’s a Sharia-compliant bank. “The way we do business is different, there’s a more human, personal element, more transparency, we promote certain values,” says Mahadeva.

Sharia-compliance follows the basic Islamic principle that prohibits riba – payment or collection of interest on loans and investments – and promotes musharakah, in which the lender and the borrower jointly share the profit of any venture but also share any loss. And of course, there is no investment in companies whose business contravenes Islamic law, such as those promoting gambling or alcohol.

“These are principles which are very valuable to me,” says Mahadeva, a practising Muslim. “But although we adhere to Sharia law, we welcome customers of all faiths. People are turning to us as an alternative.” And Gatehouse is growing apace. More and more customers are seeking that borrowing alternative (it doesn’t offer mortgages but a “home purchase plan”, jointly buying a house with the customer, who pays monthly rent instalments on the bank-owned share to buy it back), and the figures back this up. “Last year we completed in excess of £150m of residential property transactions and more than £100m in commercial property,” says Mahadeva.

“In 2017 our gross assets were £280m, and last year they were up 55% to £436m.” Mahadeva first knew his future lay in finance as a 16-year-old, when he did work experience at a small accountancy firm near London’s Victoria. “It was only two weeks but I took part in an audit, met clients – I had a natural affinity for maths but that two weeks really cemented this as something I wanted to do.” He eschewed a degree in accountancy and gained an LSE degree in management science. “I realised that would give me a broader understanding of business, and I could home in on finance during my ACA.” After university he articled at Mercer & Hole in St Albans. “It was a conscious choice not to go for the Big Four; I got a varied client base, a broad grounding and solid support to learn about a wide range of businesses, from sole traders to £50m turnovers.”

But in time Mahadeva was keen to specialise – “financial services seemed an interesting place to be” – and joined Ernst & Young as an audit executive. “That was enjoyable in a different way,” he recalls. “I was interested in banking and the capital markets and they had such a massive infrastructure, so many departments, such a huge machine of support and advice around you.” Further opportunity came 18 months later with a move to Barclays, where he further honed his skills first in financial control and interest rate derivatives, and then product control.

“That was another excellent learning experience, but I always felt there that I was a small piece of a larger puzzle. I wanted to be able to own a finance function from start to finish, to head a finance team, so I looked for a smaller firm – and found Gatehouse. “I joined as head of finance, reporting directly into the chief financial officer, providing analysis for the strategic decision-making. I felt my input was making a difference – and that of course increased further two years ago when I became CFO myself.”

Away from work, Mahadeva and his wife Fatema have three children aged five and under – “that’s an entirely different pressure”, he laughs – and he relaxes by playing golf, and football twice a week when injuries permit. “I love football,” he says. “I grew up near Wimbledon in the 1980s so I was a big fan of the Crazy Gang – Vinnie Jones was my hero. But I fell out of love with them when they moved to Milton Keynes and became MK Dons.”

He’s more enduringly passionate about Gatehouse, whose ethos was described recently by its CEO Charles Haresnape as a “human approach” that means “it’s never the computer that says ‘no’”. Says Mahadeva: “It is a friendly bank, and I’m proud of the way we do things. People are looking for that more personal approach, that partnership, which is why we’re not just attracting customers, but staff, too. It’s an exciting place to be.”

The account

I like being an ACA because... It’s given me a strong foundation in business and created opportunities I wouldn’t otherwise have had.
I’m happiest when… I’m spending time with my family.
The hardest lesson to learn has been… Dealing with different mindsets and overcoming them.
I’d like to be remembered as… Someone who treats people fairly and always keeps his word.
Love of my life is… I have three: football, family and friends. But not in that order!
My worst habit is… Sleeping too late.

Originally published in Economia on 18 July 2019.