LONDON (Reuters) - Metro Bank, which launched a year ago as Britain’s first new high-street lender in more than 100 years, could break even by 2013 after opening 25,000 accounts so far.
The bank is one of several new entrants seeking to break into a UK banking sector dominated by the “Big Four” of Lloyds, Barclays, HSBC and Royal Bank of Scotland, following the global financial crisis.
“We’re opening about 1,000 accounts a week. In twelve months from now, we’ll have over 100,000 accounts,” Metro Bank’s American billionaire co-founder Vernon Hill told Reuters in an interview.
Metro Bank’s launch last July attracted much publicity, partly due to advertising gimmicks such as offering free biscuits for customers’ dogs. It has also sought to stand out by making its branches open seven days a week.
Hill said Metro Bank’s account numbers were ahead of the company’s internal targets.
He added that Metro, which had a first-year loss of around 20 million pounds ($32.6 million) as a result of the launch costs, hoped to be “around the break-even” level in two year’s time.
Hill founded America’s Commerce Bank in 1973. Commerce Bank grew rapidly and was eventually sold to Canada’s Toronto-Dominion Bank in 2008, and Hill aims to replicate that success with Metro Bank.
Metro Bank has attracted some criticism from financial advisers for not offering rates as attractive as some rivals, but Hill said this had not deterred many of its customers.
”People want value but also good service and convenience.“ Britons care about the entire customer experience, of which rates form only one part.”
Critics have also said Metro Bank might only attract some of the less affluent clients not wanted by bigger banks.
However, Chief Executive Craig Donaldson said one customer had deposited 250,000 pounds ($408,000)at Metro’s head office branch in central London, while Hill said Metro Bank had also attracted some small businesses looking to open corporate accounts.
Metro Bank, whose investors include fund management company Fidelity and property investors the Reuben brothers, has said it may consider a stock market listing in 2013.
It also has a long-term goal to get up to between 5 and 10 percent of the London retail and commercial banking market.
“If we get 5 percent of the London deposit market, we’ll be a 50 billion pound bank,” said Hill. ($1 = 0.613 British Pounds)
Editing by Erica Billingham