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Metro Bank prepares for high street launch
A new banking presence in the British high street is expected to receive authorisation from the FSA before the end of the year, according to a source close to the deal.
The source, who wished to not to be named, said authorisation from the City regulator for Metro Bank was expected at any minute, with the FSA and the bank currently ironing out "small issues".
Metro Bank already has two branches in London, one in Holborn and one in Earls Court, with the slogan "Love Your Bank" emboldened across the shop front.
Vernon Hill, who established Commerce Bank in New Jersey in the 1970s, has been named as one of the directors and Metro Bank and the UK branches are expected to have the same philosophy and model as Commerce's US branches, with open plan layouts and no screens.
Commerce Bank was sold to Canadian bank TD in October 2007 for $8.5bn (£5.2bn).
Metro Bank also plans to operate seven days a week.
Anthony Thomson, chief executive of the Financial Services Forum, has been working on establishing Metro Bank and became a director in November 2007.
He said he was unable to comment on the impending launch as the bank was currently in a "quiet period" while it was capital raising.
Howard Flight, former Conservative MP and financial services industry executive, is a senior non-executive for Metro Bank.
He said it would be "inappropriate" to comment on the developments or the authorisation.
Erin Davis, a Chicago, Illinois-based senior equity analyst for Morningstar, said now was the time for financial institutions to get into the UK banking sector.
She said: "UK banks do not have a good reputation for customer service and many people do not switch their current accounts, but there are people who always want to move so it could work.
"If I was Lloyds Banking Group, I would not be shaking in my boots, in the US it is different as there are many more smaller banks. If you were a financial institution that wanted to get into the UK bank sector now would be the time as you can get a good size foothold."
Tony Vine-Lott, director general of Tax Incentivised Savings Association, said other financial institutions were looking to gain entry into banking as it can be very profitable due to a massive cost/income ratio.
He said: "A couple of other banks are waiting in the wings, I do not know who they are, but the sector is very profitable.
"Metro Bank is coming out with a new model and the impression I get is that it is coming with a new philosophy."
Jason Knauf, spokesman for the Treasury, said Lord Myners of Truro, financial services secretary to the Treasury, had met with a number of banks, including Metro, who said they were interested in establishing a high street presence.
He said: "Lord Myners has been meeting with a number of institutions and is happy to talk to anyone who is interested in setting up a high street bank. There are a number of institutions that are interested in entering the UK market.
"The government will sell Northern Rock and Lloyds Banking Group, and Royal Bank of Scotland is selling some of its assets so there should be three new high street banks in the next few years. Metro and Tesco Bank have said that it will not wait until the government divests its stake in Northern Rock to enter the market."
Lesley McLeod, executive director of communications for the British Bankers' Association, said it welcomed new entrants on to the high street.
She said: "It is a good idea and it is a good thing to have customer choice. We have always welcomed competition on the high street. How many people will want to open an account with them though, is too early to say."
Heidi Ashley, spokesman for the FSA, said that it did not comment on individual financial institutions but said it could take up to a year for a financial institution to become authorised.
She said: "How long an authorisation takes depends on the information that the institution provides for us, if it does not have all the information it takes longer.
"It can take up to a year and the statutory time to become authorised is a year for a final and complete application."
- Story by: Joy Dunbar
- Magazine: FinancialAdviser
- Published Thursday , December 17, 2009
A new banking presence in the British high street is expected to receive authorisation from the FSA before the end of the year, according to a source close to the deal.
The source, who wished to not to be named, said authorisation from the City regulator for Metro Bank was expected at any minute, with the FSA and the bank currently ironing out "small issues".
Metro Bank already has two branches in London, one in Holborn and one in Earls Court, with the slogan "Love Your Bank" emboldened across the shop front.
Vernon Hill, who established Commerce Bank in New Jersey in the 1970s, has been named as one of the directors and Metro Bank and the UK branches are expected to have the same philosophy and model as Commerce's US branches, with open plan layouts and no screens.
Commerce Bank was sold to Canadian bank TD in October 2007 for $8.5bn (£5.2bn).
Metro Bank also plans to operate seven days a week.
Anthony Thomson, chief executive of the Financial Services Forum, has been working on establishing Metro Bank and became a director in November 2007.
He said he was unable to comment on the impending launch as the bank was currently in a "quiet period" while it was capital raising.
Howard Flight, former Conservative MP and financial services industry executive, is a senior non-executive for Metro Bank.
He said it would be "inappropriate" to comment on the developments or the authorisation.
Erin Davis, a Chicago, Illinois-based senior equity analyst for Morningstar, said now was the time for financial institutions to get into the UK banking sector.
She said: "UK banks do not have a good reputation for customer service and many people do not switch their current accounts, but there are people who always want to move so it could work.
"If I was Lloyds Banking Group, I would not be shaking in my boots, in the US it is different as there are many more smaller banks. If you were a financial institution that wanted to get into the UK bank sector now would be the time as you can get a good size foothold."
Tony Vine-Lott, director general of Tax Incentivised Savings Association, said other financial institutions were looking to gain entry into banking as it can be very profitable due to a massive cost/income ratio.
He said: "A couple of other banks are waiting in the wings, I do not know who they are, but the sector is very profitable.
"Metro Bank is coming out with a new model and the impression I get is that it is coming with a new philosophy."
Jason Knauf, spokesman for the Treasury, said Lord Myners of Truro, financial services secretary to the Treasury, had met with a number of banks, including Metro, who said they were interested in establishing a high street presence.
He said: "Lord Myners has been meeting with a number of institutions and is happy to talk to anyone who is interested in setting up a high street bank. There are a number of institutions that are interested in entering the UK market.
"The government will sell Northern Rock and Lloyds Banking Group, and Royal Bank of Scotland is selling some of its assets so there should be three new high street banks in the next few years. Metro and Tesco Bank have said that it will not wait until the government divests its stake in Northern Rock to enter the market."
Lesley McLeod, executive director of communications for the British Bankers' Association, said it welcomed new entrants on to the high street.
She said: "It is a good idea and it is a good thing to have customer choice. We have always welcomed competition on the high street. How many people will want to open an account with them though, is too early to say."
Heidi Ashley, spokesman for the FSA, said that it did not comment on individual financial institutions but said it could take up to a year for a financial institution to become authorised.
She said: "How long an authorisation takes depends on the information that the institution provides for us, if it does not have all the information it takes longer.
"It can take up to a year and the statutory time to become authorised is a year for a final and complete application."
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