First new UK bank in 100 years opens doors

Cookie_Monster

Apologies if not the most appropriate section for this.

The article specifically point to poor rate competitiveness being a likely major factor in hindering their growth. Maybe its just me but for the average person on the street are the much increased opening hours not a big factor, even more so than rates, especially on current accounts.

I would have thought that for a customer not looking for loans this would be a good place to bank.

Any thoughts?



Link

The first high street bank to launch in the UK for more than 100 years opened its doors to customers today but its products received a lukewarm response from industry commentators.

Metro Bank promised to revolutionise the British banking experience through offering retail opening hours, unparalleled service and a simple range of products that will be suitable for everyone.

But none of the products launched today was competitive enough to make it on to the best-buy tables, while many paid below the industry average.

However, the group did win praise for its longer opening hours, which will see its branches open from 8am to 8pm Monday to Friday, as well as from 8am to 6pm on Saturday and from 11am to 4pm on Sunday.

The bank will be closed on only four days of the year, namely Christmas Day, New Year's Day, Good Friday and Easter Sunday.

It also promises customers that it will take just 15 minutes to open an account in one of its branches, including obtaining a credit or debit card, which will be printed in store.

The group, which opened its first branch in Holborn today, was co-founded by US billionaire Vernon Hill and Anthony Thomson, who is chairman of the Financial Services Forum, and it is based on the model used for Commerce Bank in the US, which was founded by Mr Hill in 1973.

It plans to open a second branch in Earls Court next month, with 10 further branches opening in Greater London during the coming two years, expanding its network to more than 200 outlets within the M25 during the next decade.

The branches will have toilets in them and, in what is thought to be a nod to its dog-owning financial backer Mr Hill, will allow dogs and provide them with a bowl of water and a bone.

The group will also have free coin counting machines in its branches which can be used by both customers and people who do not have products with it, as well as safe deposit boxes that can be rented out for £100 a year.

As well as its range of consumer products, the group also plans to offer personalised business banking services, with local managers making decisions on loans for local companies.

Craig Donaldson, chief executive of Metro Bank, said: "We know that UK banking customers are looking for a new, convenient way of banking with easy-to-understand products and that's what we will offer.

"We will deliver a service that exceeds expectations with customers at the heart of everything we do."

But commentators were underwhelmed by the products the group is launching, despite its promise that they would have no small print and no gimmicks.

These include an instant-access savings account offering a return of just 0.5pc, compared with a best-buy rate of 2.8pc, as well as a three-year fixed rate bond paying only 3pc, significantly below the market leading rate of 4.3pc.

The group's mortgage offering is equally uncompetitive, with a two-year variable rate mortgage for someone with a 40pc deposit of 3.5pc, while a two-year fixed rate deal for the same borrower is 4pc, compared with best-buy rates of 2.29pc and 2.99pc respectively.

It also raises its mortgage rates by 1pc for people looking to borrow up to 80pc of their home's value.

The group's current account charges interest of 15pc on overdrafts, compared with an industry average of 14.1pc.

However, its personal loan rate of 10pc is more competitive, although still not a best buy, while it is charging interest of 13pc on credit card purchases and cash advances, compared with an industry average of 18.5pc for purchases and 25.6pc for cash.

David Black, of financial information group Defaqto, said: "It's going to be a slow burn to get moving in terms of market share. Its products aren't going to trouble the best-buy tables."

He added that as the group was not using risk-based pricing, under which rates for unsecured credit vary according to a customer's credit rating, they were likely to have to turn down a lot of applicants.

Michelle Slade, of Moneyfacts.co.uk, said: "Although they are offering all these other benefits, such as longer opening hours, one of the main things for people is a competitive interest rate.

"If they haven't got at least a reasonable rate of interest people will discount them. They are going to struggle to get market share."

dotsman

Certainly wouldn't be a bank I wouldn't be interested in.

Being far more expensive, and offering very little in return, I would run a mile. There was a recent thread on here about opening hours, and as per what I said on that, I would never need to go to a bank bar the very odd exception. I much prefer my free banking, with all the bells and whistles, and using online/ATM/post to do everything I need on a day-to-day basis.

stepbar

dotsman wrote: »

Certainly wouldn't be a bank I wouldn't be interested in.

Being far more expensive, and offering very little in return, I would run a mile. There was a recent thread on here about opening hours, and as per what I said on that, I would never need to go to a bank bar the very odd exception. I much prefer my free banking, with all the bells and whistles, and using online/ATM/post to do everything I need on a day-to-day basis.

You have to remember that it's the UK where banking services are FAR more expensive than we have here. They will probably appeal to those who are looking to move from existing providers in terms of personal lending and credit cards. I have a BOI Sterling Credit card and from memory the interest rate is 15.9%. 15% on an overdraft is fairly standard amongst the big banks so they may pick up a few customers who are looking to do personal business. Other than that I can't see many people taking up their savings and mortgage offers.

Cookie_Monster

Well it would certainly interest me.

I don't have a deposit account so don't care about rates for them
All current accounts offer crap interest regardless
I will shop around for loans anyway
No idea what interest rate my CC has, only ever paid interest one month in 3 years due to bad planning on my part. so not an issue either
Will never use an overdraft.

If they have current account charges, that would be the only thing to bother me.

r3nu4l

stepbar wrote: »

You have to remember that it's the UK where banking services are FAR more expensive than we have here. They will probably appeal to those who are looking to move from existing providers in terms of personal lending and credit cards. I have a BOI Sterling Credit card and from memory the interest rate is 15.9%. 15% on an overdraft is fairly standard amongst the big banks so they may pick up a few customers who are looking to do personal business. Other than that I can't see many people taking up their savings and mortgage offers.

Their personal loans, mortgages etc aren't even in the best buy tables in the UK, they offer nothing other than longer opening hours and allowing you to bring your dog in...

Their savings rate is poor too.

Most UK banks open on Saturdays so even the longer weekly opening hours aren't that attractive, especially for someone like me who does 99% of my banking online.