A group of Scottish business leaders are supporting the expansion of a local bank that was unscathed by the financial meltdown – Airdrie Savings Bank.
The backers of the 175-year-old mutual include Brian Souter, founder and chief executive of Stagecoach, and his sister, Ann Gloag; Sir Tom Farmer, founder of Kwik Fit; and Sir David Murray, the metals magnate who also own Rangers FC.
Other supporters include Sir Angus Grossart, the Edinburgh merchant banker who is a former deputy chairman of Royal Bank of Scotland, and DC Thomson, the family-owned publisher of the Sunday Post and the Beano.
The group plans to deposit about £10m ($15.5m) with the bank, which intends to create at least one, and possibly two new branches over the next 18 months. It currently has only seven outlets – all in North Lanarkshire in central Scotland.
Mr Souter said Airdrie Savings Bank represented what Scottish banks once stood for – security of funds, a focus on savings and outstanding personal service.
“We aim to bring this traditional blend to the people of Scotland by supporting the bank’s development as we believe the mutual principle is fundamental to the integrity of the bank,” he said. “We are doing this because so many Scots are dismayed at what has happened within the banking sector.”
The crisis that two years ago engulfed RBS and HBOS, which subsequently became part of Lloyds Banking Group, has caused concern about their dominant share of the market – particularly for small and medium-sized businesses.
Bob Boyle, president of Airdrie Savings Bank, said the motives of the new backers were “entirely altruistic” and there was no intention to change its status. But he said they hoped to improve competition.
It is only in the past 25 years that the Airdrie bank started lending to personal customers and then subsequently to business customers. Last year it made a pre-tax profit of £270,000, and had reserves of £14.7m and total assets of £150m.
Jim Lindsay, general manager of the bank, said the location of the first additional branch would be influenced by local demand.
He said: “We are considering a number of locations, but we would obviously like to open our first branch outside of Lanarkshire, in a town or city where local people and businesses would welcome a traditional bank that has a low-risk focus and puts customers first.”