Metro Bank, the self-styled “UK’s first new high street bank for over 100 years” has opened its first branch, claiming a “revolutionary” approach to banking that will give “unparalleled service and convenience”.
But it concedes that its product range of current and savings accounts, as well as credit cards, mortgages and personal loans, do not offer “best buy” rates.
The bank’s first branch, in Holborn, central London, will be followed in coming weeks by three more branches in Greater London.
As well as being open seven days a week from 8am (Monday to Saturday) to 8pm (Monday to Friday) and 11am to 4pm on Sundays, customers can bring their dogs in to a Metro branch and even treat them to in-branch dog biscuits.
Customers will have their debit and credit cards printed in branch and issued in 15 minutes.
The bank also offers a commission-free coin-counting machine – the “Magic Money Machine” - that allows customers and non-customers to consolidate sterling coins into bank notes or make a deposit into a Metro account.
Metro, which is based on the service-oriented model of Commerce Bank in the US, plans to open about 10 branches in Greater London over the next two years as part of eventual growth to more than 200 outlets.
However analysts question whether Metro’s offering will be sufficient to attract customers away from existing banks and building societies, given the new bank’s unexceptional rates.
Metro’s instant access savings account pays only 0.5 per cent, compared with the highest available rates of just under 3 per cent elsewhere in the market. Its current account pays no credit interest and charges 15 per cent for overdrafts – although over-50s qualify for a free safe deposit box at the bank for their first year. Metro’s mortgage rates are all about one percentage point worse than the cheapest in the market, according to London & Country Mortgages.
Annie Shaw of CashQuestions.com, the financial website, said: “Metro Bank is good on gimmicks, but most customers will be looking at the lolly they can save not the free lollipops Metro Bank is giving away.”
New customers also have to go into a branch to apply for an account or, as the bank puts it, “to establish a relationship”.
The bank hopes to open 10,000 current accounts in its first year of operation.