Interview: Graeme Hartop, CEO of Edinburgh-headquartered private bank Hampden & Co

Graeme Hartop is the chief executive of Edinburgh-headquartered private bank Hampden & Co, which opened its doors to clients in 2015, saying it was the first new lender of its kind in the UK for 30 years.

The bank, which serves personal and professional clients across the UK and also has offices in London, in April of this year announced its first full-year profit, posting pre-tax profit of £2 million for 2022, and saying that it had “come of age”. This was followed in August by it revealing 2023 interim results, registering a pre-tax profit of £5m, and total lending having grown 6 per cent year on year to reach £461m, for example.

Hartop is a qualified chartered accountant and banker with more than 30 years’ experience in his industry. He was head of finance at Adam & Company, and has said: “This was the first pivotal moment for me, as I joined an area of financial services that I had a strong affinity for and I have enjoyed the variety and challenges, of which there have been many, in my banking career ever since.”

The executive then joined Scottish Widows Bank in 1993 as finance and operations director, going on to become its MD in 2003. Furthermore, he was a council member at the Chartered Banker Institute and its vice-president from 2007 to 2010.

The banking boss says reaching profitability in 2022 was a 'significant milestone'. Picture: Stewart Attwood.

In 2013 he joined Hampden & Co, having been approached by banking industry veteran Ray Entwistle to discuss setting up a new lender to accommodate the commercial banking needs of high-net-worth individuals, and he has previously said he spied a “really significant opportunity in the market”.

The lender has grown to more than 5,000 clients and 153 staff, has announced a string of senior appointments, and says its bankers have an average of 33 years’ industry experience. Hartop said in August alongside its H1 results: “The UK banking sector continues to experience change and we believe we are very well-positioned to increase market share in the private banking sector as well as to meet the needs of underserved high-net-worth customers of high-street banks.”

August also saw the publication of a report by McKinsey that found industry profits at private banks in Europe collectively rose 1.7 per cent to €22 billion (£19bn) in 2022, but it also flagged growing costs in the sector.

How significant a milestone was Hampden & Co achieving its first full-year profit in 2022?

Hannah Berridge, Hampden & Co's head of professional partnerships. Picture: contributed.

Reaching profitability in 2022 was a significant milestone as it is evidence that Hampden & Co has been built on strong foundations and is now firmly established as a successful bank in the UK. This is testament to the hard work of our team and the support of our shareholders. It’s also a sign that there is strong demand for our services from people who value having access to an experienced banker.

With high-street banks coming in for criticism for service levels in recent years, is that something Hampden & Co has benefited from?

Yes, we have and it’s a trend we see continuing. We have welcomed many new clients because they were disappointed in the service they were receiving from their existing bank. For example, they were frustrated by branch closures and then being forced online or into using a call centre where queue times can be lengthy.

Is there a misconception that accessing a private bank is only possible for the super-rich?

A private bank like Hampden & Co is more accessible than people might think. We welcome having the conversation with prospective clients. While a private bank is clearly not for everyone, and there are associated costs, more and more people who value service are leaving traditional lenders to bank with us.

How did the Covid-19 pandemic affect the bank and how has it changed since?

As a bank focused on delivering a personalised service that is often delivered face to face, we had to find new ways to work and do business. Increased reliance on technology to meet with clients came to the fore, and remote working as a team became the norm until we came out of the pandemic. As it was for all businesses, it was a challenge and by continuing to engage with clients during that time, we feel like we have come out of it stronger.

Did clients rely more on digital banking during the pandemic?

Clients like digital banking for its convenience, however, it is there to complement the personal service they receive from their nominated banker. We kept that crucial personal relationship going using virtual meetings until it was possible to meet up in person again.

What is your view of and outlook for the economic backdrop?

Financial markets are likely to remain volatile for some time. While inflation has reduced slightly from recent highs, we expect that interest rates will remain at or around these more historically normal levels for the foreseeable future.

The bank has said it continued to perform strongly in the first few months of 2023, what is your outlook for its progress over the year as a whole, and beyond?

For the first half of 2023, we announced year-on-year growth in income, deposits, lending and client numbers, as well as a profit of £5m. We expect to continue to grow steadily in the coming years and to add to the team to meet the needs of our growing client base.

We believe there are many people who are currently underserved by their existing bank and who would benefit from access to the services of an experienced banker. As more people become aware of the bank, demand for our services combined with continued support from other professional advisers, present significant opportunities to grow.