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Metro Bank expansion is great news

Ed Bowsher
by Lovemoney Staff Ed Bowsher on 11 June 2012  |  Comments 2 comments

Metro Bank has raised £126 million from investors to support further expansion.

Metro Bank expansion is great news

Metro Bank opened its first branch in 2010 with an emphasis on customer service and long opening hours. All branches are open seven days a week with 12-hour opening from Monday to Friday.

The bank currently has 12 branches in the Greater London area and plans to open seven further branches this year.  For the first time, some branches will be opened outside London including Brighton, Reading and Hemel Hempstead. Metro hopes to have 200 branches by 2020.

Customers

Metro also says it now has 80,000 business and personal customers which is an impressive achievement given that its products rarely top best buy tables. There’s clearly a demand for high quality, branch-based customer service.

It seems that Metro’s only real failure has been in mortgages. Last November, there were reports that the bank had only sold 100 home loans. Perhaps the mortgage market is an area where customers focus more on the interest rate rather than customer service.

Competition

The growth of Metro Bank is good news because it means more competition in the retail banking market.  Increased competition is the best way to ensure that banks stop trying to rip us off with dodgy products.

Metro’s expansion follows last week’s news that M&S is about to launch a full service bank offering current accounts and mortgages. What’s more, Tesco is expected to launch a current account at some point in 2013.

It’s all very encouraging, but don’t forget, you have a role to play too. If everyone carries on banking with the same bank they’ve always banked with, not much will change. But if a significant number of customers are prepared to switch, the benefits of greater competition should kick in for everyone.

More on current accounts:

 Halifax relaunches £100 switching bonus 

Clear your overdraft in three weeks

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Comments (2)

  • PDB11
    Love rating 72
    PDB11 said

    I approve of good, branch-based customer service.

    That's why I left Santander - they fill their branches with friendly, helpful staff, and then put in layers of computer systems to make it as hard as possible for those staff to do anything for you. It's also one reason I left Intelligent Finance - no branch service at all.

    I'll not be going to Metro in the near future, or even the distant future, I fear, because the chances of there being a branch anywhere near me are vanishingly small. I have no wish to live in London, and not much wish to live in any big city. They may get to the greatest number of people by expanding to the big cities first, but they won't reach the people with the greatest need of a bank branch.

    It's a similar situation to that in public transport when that was deregulated. Two or three bus companies on the popular routes, nobody at all serving the less popular ones. Now it'll be a wide choice of banks in the city centres, including Metro and M&S, but still the same few plus a converted building society or two in the smaller towns. Post Office had potentially a huge advantage there, but they don't seem to be realising it, with the closure of village branches...

    Report on 13 June 2012  |  Love thisLove  0 loves
  • AjaiR
    Love rating 0
    AjaiR said

    Metro Bank are trying to do something different and giving people choice.

    Their strategy starts with the customer and works from there-this is completely and utterly different from any of the existing banks. Of course, they are a commercial enterprise so if they are choosing to start by opening branches in London because that works best for them, so be it.

    In such a difficult environment to provide choice to consumers, at least they are giving us a genuine choice to have a different sort of relationship with the bank (if you choose).

    Report on 26 July 2012  |  Love thisLove  0 loves

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