Metro Bank, which launched into the UK retail banking sector from its American base with the unveiling of its Holborn branch in London in 2010, and is now approaching its target of 20 nationwide branches, has more than tripled its lending to businesses last year.
The new bank’s business lending unit, which focuses on small and medium-sized enterprises (SMEs), lent £97.5m to British companies in 2012, compared with £32.3m previously. The sums are modest compared to the lending figures of the UK’s ‘big four’ banks, consisting of Barclays, HSBC, RBS and Lloyds, but contrast with the reduction in lending by the other major banking groups.
The figures could help Metro Bank UK attract more customers as a newcomer bank seeking to break the stranglehold of the ‘big four’ on UK High Street banking. Sainsbury’s Bank is also trying to win UK retail banking market share, along with Virgin Money, Tesco Bank and others, but these all face legacy technology concerns, unlike Metro Bank with an entirely new start-up and has outsourced all its technology and support systems to partner vendors like Temenos, which provides its core banking solution.
Metro Bank UK’s expansion has focused on London and the southeast England so far, but the nationwide rollout will pick up pace maintains the bank. The 19th premises in the growing branch banking network is due to open outside of the capital this month and the group has ambitious plans to launch 200 branches by 2020. It also wants to list on the London stock market as early as next year.
Metro Bank UK’s founder and former chairman, Anthony Thomson, said: “I believe there is a real opportunity for the creation of new banks that can serve the needs of individuals, communities and businesses. I think we will see between five and 15 new [UK] banks over the next three to five years.”
The difficulty of entering the UK retail banking marketplace, however, was highlighted earlier by Vernon Hill, who launched the brand more than 30 years ago in the US, and has attacked the red tape, difficulty and barriers to entry of setting up in the UK.