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New banks look for British foothold

British banking spoils eyed by half a dozen groups including foreign banking giants and former analyst Sandy Chen.

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by Chris Marshall on Jan 04, 2010 at 08:44

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Several banks are eyeing a move into Britain, with reports suggesting that National Australia Bank is gearing up for a takeover of nationalised lender Northern Rock.

NAB is said to also be prepared to bid for hundreds of branches being sold by Royal Bank of Scotland. The bank already owns Clydesdale and Yorkshire banks in the UK.

Separately the Sunday Times reported that Brazil’s biggest bank, Itau Unibanco, is considering buying a stake in one of Britain’s nationalised banks, with both Royal Bank of Scotland and Lloyds Banking Group being considered.

Sandy Chen, the former Panmure Gordon banking analyst, is aiming to raise around £200 million within the next couple of weeks for his new banking group which will raise deposits from affluent individuals. Chen’s bank – which has the working title of ‘Bank of Britain’ – is one of three tipped to receive banking licenses over the coming weeks.

US financial entrepreneur Vernon Hill is expected to win approval for his plans to launch Metro bank in the UK. Hill, who already has around 30 Metro branded branches in the US, plans to open 12 branches in London over the next two years.

Virgin Money is also hoping to win approval for a banking license, and alongside NAB and supermarket group Tesco is also seen as a potential acquirer for Northern Rock, which has just received regulatory approval for its split into a good and bad bank.

The government wants to encourage new banks into the UK to increase competition for consumers. Dismayed at the lack of reform of banks after the credit crisis, a group of cross-party MPs including Liberal Democrat treasury spokesman Vince Cable announced at the end of last year plans for a series of events where members of the public can say how they think British banking should look in the future.

One option that the government is considering to improve access to banking services is the creation of a Post Office ‘People’s Bank’ offering everything from current accounts to mortgages. With over 11,500 branches nationwide, 99% of the British public lives within three miles of a Post Office branch, meaning it could fill a gap being created as banks close branches to cut costs.

Campaigners at Consumer Focus today published a report claiming that nearly one million of the poorest people in the UK could be lifted out of financial exclusion if a new, simple-to-use bank account was launched by the Post Office network.

Andy Burrows, postal expert at Consumer Focus, said: ‘Many on low incomes feel poorly served by the banks, but trust the Post Office.

‘This is a golden opportunity for the Government to lift thousands out of financial exclusion.’

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10 comments so far. Why not have your say?

I know....let's call it GIRO!

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Thanks to the Labour government shutting thousands of Post Offices, those that remain are under great pressure and provide a stressful experience for both staff and customers.

To think that anyone would voluntarily join a queue for up to 40 minutes in this area to do some banking is ridiculous.

I avoid Post Offices if possible and send most parcels by private carriers, who are far more efficient and collect from our premises.

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The post office is expected to provide a valuable public service of universal delivery (yes, even on behalf of private mail services!) but is being robbed of the profitable areas and lumbered with the non-profitable. A banking service may usefully plug this gap and, perhaps, halt the closure of branches since these would provide convenient local access to accounts.

Who would deliver everywhere in the country if the post office did not exist?

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I supprt foreign banks to operate at a competative level in the uk. The existing banks are robbing the public in the hide of charges and using public money by realesung their funds with an unreasonable delay to transfer money at their own pace.

I support that all banks in the uk should be broken up to creat competative practice in charges, transfering the money quickly and clearing the cheques quickly within three days and not five to seven days where the money has been utilised by the banks for their own purpose.

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I SUPPORT THE POST OFICES GIVEN THE AUTHORITY TO SUPPLY THE SAVINGS AND CURRENT ACCOUNT FACILITIES AT A FAVOURABLE PRICES AND COSTS TO COMPETE WITH THE BANKS.FREE SERVICE WILL BRING PUBLIC TO THE POST OFFICE AND THE POST OFFICES WILL THEN PROVIDE BETTER SERVICE WITH INTRODUCING NEW STAFF WITH THE ESXCESS OF WORK PROVIDED ON FAVAOURABLE TERMS.

BANKS MUST BE TOUGHT A LESSON IN PRACTICE THAT THEEY CANNOT GET AWAY WITH MURDER.

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We have to differentiate between the provision of a banking service, and the physical presence of a building staffed by bankers.

Evolving developments in information technology and electronic transfer of cash suggest that fewer banks are needed, not more.

I welcome increased competition if it can provide a better service through efficiency, and good management, but I fear that some existing banks, burdened as they are with bad debts an low margins, will go to the wall.

I am surprised that Standard Chartered is not joining the fray, after all they are one of the most successful british banks, and yet the service they provide to UK customers is negligible.

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Banks should not be broken up they should be allowed to grow.

Economies of scale should mean even lower charges.

The vast majority of customers pay no fees at all so why is everyone so upset.

Lets all take a deep breath and get real.

BANKS RUN THE ECONOMY.

Individuals dont, governments certainly not.

Whoever controls money controls everything.

Overseas banks are laughing all the way to the er ... bank.

When Lloyds get weaker Santander will get stronger. If there is another collapse we will be bailing out foreign banks or our whole economy will collapse.

Banks hate government intervention, they did not engineer our predicament BUT give it 2 or 3 decades and we will have another meltdown BUT we will be very much richer than we are now.

BOOM & BUST IS AS NATURAL AS RAIN AND SUN........ clock is ticking til the next one so grow the hell up and accept reality.

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Funny old world. Harold Wilson set up Girobank - the people bank a long time ago. The Conservatives finally flogged it to Alliance & Leicester (and look what happened to them). Girobank was actually a very good, efficient bank and most of the big high street stores used its commercial services. I imagine all those Girobank people that Alliance & Leicester made redundant will be applying to get their jobs back. And yes, a new Post Office Bank could just save a load more sub-post offices from being closed down.

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What's the point?

If Cameron gets in, he will just flog it off again.

VOTE CAMERON, GET THATCHER.

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Qaz Max

Jan 07, 2010 at 12:01

'The Former analyst is raising £200 Million to form a New Banking Group' How is this crook managing this? by making money out of shorting barclays stocks. Sandy Chen was guiding investors to sell sell sell Barclays stocks, target 55p, now over £3 pound.

Another crook who got away.

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