London: Metro Bank, Britain's first new high street lender for over 100 years, opened its first branch to the public — and dogs — yesterday in a move aimed at shaking up the retail banking sector.
Co-founded by billionaire US businessman Vernon Hill, Metro Bank hopes to tap into public dissatisfaction with traditional banks following the global financial crisis.
The first branch opened in central London — offering dog biscuits to poodles accompanying their owners signing up for new accounts. Metro Bank aims to have up to 250 branches in and around the city within 10 years.
"Everything you hate about your existing bank is what we are going to change," Metro Bank chairman Anthony Thomson told media.
"Since the banking crisis, everybody's come to realise [that] the kind of banking we're doing — which is taking in deposits, making a proportion of those available as loans to customers — is the way forward," said Thomson, who set up the bank with Hill.
But analysts have questioned the competitiveness of the financial products being offered. Metro's instant-access savings account offers a return of 0.5 per cent compared with the industry's best rate of 2.8 per cent.
Its three-year fixed rate savings bond, meanwhile, pays three per cent compared with the market-leading rate of 4.3 per cent.
"It has been open in stating that it won't be chasing customers through the use of ‘best buy' products; instead it will focus on service and doing things differently," said Kevin Mountford, head of banking at price-comparison website Moneysupermarket.com.
Opening rush
Tens of people lined up outside the first branch, in London's Holborn district, ahead of its opening early yesterday.
Twenty-year-old student Dikepa Ranawake said he was attracted by the bank's openness.
"I was excited by the prospect of a new bank that was hassle-free, that wasn't confusing ... I think all banks have the tendency to try and take your money and I think the transparency that's been suggested by this new bank, the ease of opening accounts, that kind of thing attracts me."
Tola Akorede, a 44-year-old computer scientist was opening an account before heading to work.
"It seems a lot of promising ideas are there ... So many ideas like removal of unnecessary charges to customers and making banking more friendly."
Metro Bank is focusing on customer service, with branches open long hours seven days a week, with a fast account opening procedure that issues debit and credit cards within 15 minutes.
And for dog-owning customers, branches are providing water bowls and free doggy biscuits. It is based on the model used for Commerce Bank in the US, which Hill founded in 1973.
Britain's previous government had called for greater competition in retail banking in the wake of the global financial crisis which led to huge multi-billion-pound bailouts of some lenders.
