New banks are quite common in many parts of the world, but there hasn’t been a new bank on a British high street for decades. That’s about to change, with London’s Metro bank due to open to customers this week. With many large banks closing branches to cut costs, a stubborn tradition of closing early, and their credibility shot to shreds by the financial crisis, the market has been wide open for a bank with a different philosophy. Metro aims to be that alternative, opening on weekends and from 8 til 8.
More importantly, Metro will not lend more than it receives in savings deposits. It won’t pay big bonuses, and mortgages will require a 25% deposit. While the business plan anticipates 200 branches by 2020, none of them will be outside the M25. In other words, it’s just the kind of bank that we’ve needed for a long time: stable, local, and with a focus on customer service rather than playing the markets. With Tesco and Virgin both due to launch their own high street competitors, Metro may not be the only new bank this year, but it may be the most enlightened.
I’ll be watching Metro’s progress with interest. There’s no reason why every town shouldn’t have its own bank, lending co-operative or savings union. A de-centralised banking system would be much more resilient to international crisis, and better equipped to serve local people and projects. Metro is in London and is still going to be a pretty big corporation, but if it succeeds it could well open the door to a re-localization of our money system.