The bank, whose head office in Edinburgh’s Charlotte Square is just a stone’s throw from Bute House, the residence of the First Minister Nicola Sturgeon, said: “It is the first private bank to be set up in the UK for 30 years and will address the significant demand in the UK for a new, high quality banking service.”
The venture was founded under the name Scoban in 2010 by Ray Entwistle, the former chairman of Adam & Co, but was rebranded in April after specialist insurer Hampden Group took a substantial stake.
Hampden & Co has recruited more than 50 qualified bankers and support staff, headed up by chief executive Graeme Hartop, former chief executive of Scottish Widows Bank.
The new business also has about 250 shareholders, the majority of which are private individuals, with launch capital of nearly £50 million. There are three “cornerstore investors”, Hampden Group, Catlin Insurance company and a private family office.
Hartop said yesterday: “The timing for launch is ideal as we continue to experience an improved economic environment, strong client demand and a favourable competitive landscape as a large number of the existing banks continue to deal with legacy issues.
“We will deliver a traditional client-led private banking service, fully focused on client needs and not product sales targets, which will lead to strong client-to-banker relationships. We are delighted to be welcoming clients on board.”
The bank will also have a London office, although it is understood all the back office, processing and finance and risk teams will be based in Edinburgh.
Entwistle said there was strong demand for a new private bank “which delivers the right quality of service with long-term continuity of personnel and speed of decision-making.”
He added: “Over 250 shareholders have come to the same conclusion and they have been prepared to back our experienced team with the capital required to launch our new bank”.
Earlier this year, Hampden & Co signed a deal with Oracle for the IT giant to provide its digital banking. It is understood the lender decided it could benefit from significantly lower operational costs by running its software via the US giant’s data centre in Linlithgow.
Hampden & Co’s opening for business coincides with a flurry of new challenger banks in the wider industry in the past few years.
These include Aldermore, Shawbrook and TSB, the latter spun off by Lloyds Banking Group and since the subject of an agreed takeover approach by Sabadell of Spain.
Newer players such as Virgin Money and Tesco Bank have also made strong market strides as the big incumbent players in the industry have been hit by the continuing fallout from scandals including the rigging of the forex and Libor markets, international sanctions busting, money laundering, and the mis-selling of personal insurance and hedging products to small businesses.
One banking source said yesterday: “Obviously Hampden & Co are a niche player, but it will gain from having names at the top that are definitely known and respected, such as Entwistle and Hartop.
“It is also always preferable to launch a bank into a relatively buoyant economy like we have now.”