Metro Bank – backed by US billionaire entrepreneur Vernon Hill – is set to launch with two banks in Holborn and Earl’s Court by April, pending final approval from the FSA.
It follows the news that a group of entrepreneurs are opening the “Boring Bank of Cambridge” later this year.
Vernon Hill has high aspirations for Metro, hoping to open 200 branches throughout London within the next ten years. And we wouldn’t be surprised if he managed to pull this off.
America’s fourth richest CEO (according to Forbes), Hill’s first entrepreneurial venture was Commerce Bancorp, which he founded in the US in 1973, and sold in 2007 for $8bn. He hopes he can now penetrate the UK market with Metro Bank.
We were interested to find out what Hill proposes – what makes it any different from the other high-street banks?
Well, to start, it aims to have its branches open from 8am to 8pm, Monday through Saturday, and 11am to 4pm on Sundays. It will also stay open on all bank holidays except for Christmas Day, New Year’s Day and Good Friday.
“We’re there for our customers’ convenience, not for our own,” he says. “How about this idea: that people work the times that customers want to come in?”
Hill adds that the banks will also have customer toilets and offer a record-breaking 15-minute service for opening accounts, complete with credit and debit cards.
“This is a retailing business that happens to be a bank,” says Hill. “The set-up here is designed to be an upscale retailer and we want it to be fun too.”
Metro has already secured £75m in its initial fundraising round, and aims to go to the capital markets for cash in its third year, to fund expansion.
Although the new bank will offer consumer accounts, loans and mortgages – as well as commercial banking services for SMEs – those looking for good interest rates should look elsewhere, as service does come at a price.
Hill says that all of the British banks compete on rates, but surveys show that rates are the most important thing to only six per cent of customers.
“Our model is to offer the best service and a fair rate – what’s more important to people is value for money. Our job is now to eliminate every stupid bank rule we can find.”
With the likes of Tesco and Virgin also toying with the idea of launching their own banks, we wish Mr Hill best of luck with his refreshing new venture.