Portillion has gone back to the drawing board after withdrawing its application to the Financial Services Authority for a banking licence.
The board’s plans to become a lender have been in the works since 2007 when former GMAC-RFC chairman Stephen Knight revealed plans to launch Checkmate Mortgages.
It rebranded to Portillion in February 2010. In February 2011 Knight decided to step down because he had a brain tumour.
The firm made its application to the FSA to become a lender in May 2011.
But a spokeswoman for Portillion says: “Portillion’s board confirms that the application to the FSA for a banking licence has been withdrawn.
“Difficult market conditions continue, however, it is the board’s belief that opportunities remain and all options are being evaluated by the board and investors.”
She says it is too early to comment on the future of the business and its 20 staff.
Portillion had set an original launch date of January 1 2012 and planned to offer a range of savings products direct and mortgages through brokers. It had secured more than £58m in investment from SBI Group of Japan.
Portillion’s chief financial officer David Hill left in December 2011 after almost two years with the firm.