‘Guinea pig’ bank ready for launch

Graeme Hartop: appointed as managing director of Scoban
Graeme Hartop: appointed as managing director of Scoban
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A NEW private bank could open its doors in Edinburgh as early as this year as regulators look to ease rules to boost the number of entrants to the market.

Ray Entwistle, chairman of the fledgling private bank Scoban, said the enterprise had attracted the support of 200 investors as well as regulators as it prepares to open its doors on Edinburgh’s Charlotte Square in 2013. Last year Scoban raised £5 million of a required £8m target.

He said the bank was currently being used as a “guinea pig” by the Financial Services Authority as the watchdog conducts a review on barriers to entry in the UK banking sector. It is thought the FSA could unveil plans to reduce the amount of capital reserves required to launch a start-up bank in an effort to improve competition.

Since the banking crisis, existing lenders have consolidated market share despite a near-universal agreement among policy makers that the market would benefit from competition. The only new bank to open its doors in the UK since the crisis is London-based Metro. The FSA is expected to publish the results of the review next month.

Scoban also recently announced the appointment of Graeme Hartop to the role of managing director. The former head of Scottish Widows Bank is expected to lead the bank’s application for a 
licence – either to the FSA or its successor regulator, the Prudential Regulation Authority (PRA), which is expected to be up and running in April.

Entwistle, who was previously a chief executive of 
private bank Adam & Co, said: “The FSA are looking at changes to entry to the marketplace. Our appointment of Graeme is important to us – but even more important, dare I say, is the potential changes for new entrants.”

He confirmed that the board of Scoban is conducting discussions with the FSA and its relationship with the regulator is productive, although he declined to specify the detail of its negotiations.

But it is thought the encouragement of the regulator led Entwistle to sign a ten-year lease at Charlotte Square last year, as well as go ahead with key appointments.

Prior to appointing Hartop, Scoban made a number of 
appointments to its management team, including chief operating officer Stuart Alexander, chief information officer Ian Jones, facilities director Alan Young and human resources manager Grace Mitchell.

“Metro Bank is the only new bank that has been licensed for some time. Over the next three or four months we will be a guinea pig as to whether the new thinking will work,” said Entwistle.

“Scotland needs a new 
private bank. We could be up and running this year.

“One of the issues everybody has faced since 2008 is getting a decision from your bank, particularly over borrowing money. We believe there is an opportunity across the UK, not just in Scotland.

“There is a feeling over the last few years that banks have lost their way. We need to get back to the fundamentals of what banking was.”

He added that Hartop’s move to Scoban was “a great buoy to the bank”.

“He will provide the long-term continuity. I am the chairman, but in a few years’ time I expect everyone I know he will know as well.”