Five new banks approved in UK in bid to promote stronger competition

Britain’s regulators have given the green light to five new banks since easing rules a year ago for new entrants to challenge the handful of dominant lenders.

The Bank of England and the Financial Conduct Authority also said yesterday, that over 25 further potential banking applicants have been interviewed as regulators face pressure from lawmakers to increase competition in banking.

Opposition Labour Party leader Ed Miliband has said he will consider limiting the market share of big banks should his party come to power in next year’s election.

Just five banks — HSBC, Royal Bank of Scotland, Barclays, Lloyds, and Santander UK — still account for more than three-quarters of lending.

The five new banks that have been authorised are: Axis Bank, Union Bank of India, FCMB, UBA Capital, and Paragon Bank.

They join other recently-launched names like TSB, spun off from Lloyds last month and emerging as a credible challenger with 4.5 million customers, as well as Virgin Money and retailer Tesco, Aldermore and Shawbrook.

Back in 2010, Metro Bank became the first new lender to emerge in the UK market for over a century, highlighting the difficulty of launching a new bank.

Regulators have since made it easier for new banks to get off the ground, relaxing some rules in March 2013, while insisting basic safeguards remain in place, such as protections on customer deposits.

A new bank now only needs £1m (€1.25m) in capital compared with the previous minimum of £5m. Authorisation of top officials has also been fast-tracked.

“It is clear that the changes introduced last year have been positive for new entrants and will make a contribution to increasing competition and thus benefit customers,” Andrew Bailey, chief executive of the BoE’s Prudential Regulation Authority, said in a statement.


Lifestyle

The TripAdvisor Travellers’ Choice Awards have been revealed. These are the destinations that came out tops.3 emerging destinations to add to your travel wish list – according to TripAdvisor data

Rita de Brún speaks with Sean McKeown, Fota Wildlife Park director and longtime Cork resident.‘You’ve got to make the changes you want to see’, says Fota Wildlife director

Designers and sustainability advocates are taking note of this eco-friendly material.What is milkweed floss and how can it be used in sustainable fashion?

Living with Van the Man, touring with Hendrix, and launching stellar musical careers, Irish music legend Dave Robinson tells Ed Power some of his tales from the industry.Music legend Dave Robinson talks touring with Hendrix, living with Van and launching careers

More From The Irish Examiner