Metro leads way in new wave of high street banks

• Backer of Metro, US billionaire Vernon Hill. Picture: Complimetary

Metro Bank – backed by US billionaire Vernon Hill – revealed that it is set to launch with two London branches in Earl's Court and Holborn as part of its assault on the banking market.

Hill, who set up Commerce Bank in America in 1973 and sold it for $8.5 billion (5.5bn) in 2007, said Metro will look to steal share from the big five existing players by pledging a revolution in customer service.

The group is set to be the first of a wave of new banks looking to enter the market over the next few years, opening up a sector that has shrunk vastly since the financial crisis. Virgin Money is also waiting in the wings, with Tesco also tipped to launch a full banking operation within a year or two.

Metro is still waiting for final approval from the Financial Services Authority (FSA) for a banking licence, but has signed up five more City heavyweights to its board ahead of the planned April launch.

Former Tory party deputy chairman and Panmure Gordon director Howard Flight and Ben Gunn, previously life and pensions boss at Friends Provident, are among those appointed.

They will join chief executive Craig Donaldson, formerly retail banking chief at Royal Bank of Scotland, and chairman Anthony Thomson, who is also chairman of the Financial Services Forum.

Metro said it will focus solely on the Greater London area, with a target to launch 200 branches within ten years.

As well as the two launch branches, Metro has hopes to open two more sites already bought in Borehamwood and Fulham Broadway this year, with a further eight in 2011.

It claims it will put customer service at the forefront, with plans to open branches from eight in the morning to eight at night and at weekends too.

The bank said that the only days on which it would close its branches are Christmas Day, New Year's Day and Good Friday.

A call centre is also planned, with operators instructed to answer within three rings.

The company said that it will provide customer toilets and offer a 15-minute service to open accounts, complete with credit and debit cards.

Metro has already secured 75 million in its initial fundraising round and is working towards going to the capital markets for cash in year three to fund further expansion.

The group's founders said that they would hire 70 staff for the first two branches and would need 20m in savings deposits for each branch to break even.

Hill said: "The number one problem we have is the inertia of people to change banks – we're going to make it easy, but typically people don't switch banks very often."

He added: "In London, opening a bank account is like having your teeth drilled. We're going to open accounts in 15 minutes."