UNITED KINGDOM: Britain's first new high street retail bank in more than 100 years 'Metro Bank' opens its doors

Record ID: 376617

  • Title: UNITED KINGDOM: Britain's first new high street retail bank in more than 100 years 'Metro Bank' opens its doors
  • Date: 30th July 2010
  • Summary: MUSICAL TRIO PLAYING INSTRUMENTS ON PAVEMENT OUTSIDE BANK PEOPLE ENTERING BANK
  • Embargoed: 14th August 2010 13:00
  • Keywords:
  • Location: United Kingdom
  • Country: United Kingdom
  • Topics: Finance
  • Reuters ID: LVABQL8SQMUTZZQF8Y5H81W65DRX
  • Story Text: Metro Bank, Britain's first new high street retail bank in more than 100 years, opened its doors to a steady stream of customers Thursday (July 29), hoping to break into a sector whose reputation was damaged by the credit crisis.
    The company's debut, in Holborn, near London's City financial district, was accompanied by an array of gimmicks such as offering biscuits to customers' dogs and free breakfasts for clients.
    "It's a whole reinvention of banking and I hope you can see and feel it here today. It's open it's friendly it's fun. Of course its very safe but this is almost the anti-bank bank model. Most of the stupid things that current banks do we do the reverse," American billionaire and Metro Bank co-founder Vernon Hill told Reuters, accompanied by his pet dog Duffy.
    Metro Bank aims to have more than 200 branches across greater London over the next decade and hopes to end up with a business evenly split between retail and commercial banking, offering a range of services including a Metro Bank-branded credit card.
    Its business plan is largely inspired by a retail-focussed model used by Hill when he founded America's Commerce Bank in 1973.
    Commerce Bank grew rapidly to become a major force in the U.S. financial industry and was eventually sold to Canada's Toronto-Dominion Bank in 2008.
    But one banking analyst questioned whether Metro will be able to deliver on all fronts:
    "Metro Bank is very much asking one fundamental question, are we willing to pay for additional services. Clearly to this point we haven't been so if you get 0.5 percent interest in this bank and you can get 1 percent from a bank across the street what are you going to select. I suspect we're going to go for the 1 percent because money always wins over," said Ralph Silva.
    But one new customer said he was willing to put his faith in the new bank:
    "It's different, I've seen the publicity, it seems more customer friendly these days. A lot of banks these days are not as customer friendly as we'd like them to be, so I'm hoping this place will be different," said Nigel Collier, who was first in line.
    Metro Bank is one of several new entrants seeking to break into a retail banking sector shaken up by the credit crisis which saw the near-collapse of some of its best-known names.
    It is the first new start-up, however, to get a licence from the Financial Services Authority regulator, and it says it will use an old-style branch network to attract customers.
    Metro Bank Chairman Anthony Thomson told Reuters last week that the bank had a long-term goal to grab up to 10 percent of London's retail and commercial banking market and has said the company could list on the stock market in 2013.
    Britain's changing banking industry is set to become more competitive with various assets sold off from bailed-out groups Lloyds and Royal Bank of Scotland that could attract the likes of Virgin Money and supermarket chain Tesco, which also plans to enter the British bank sector.
    However, Metro Bank has said it is not interested in acquisitions and aims to grow on a branch by branch basis.
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