METRO Bank may not have been established if founder Vernon Hill had realised in advance how arduous and expensive the process of getting a banking licence would be, the American billionaire said yesterday.
It is famously difficult to get a new banking licence issued, as the new venture’s backers must prove they have enough capital before they can have the permission, but generally need the licence before they can attract the necessary capital.
Hill set up Metro Bank in 2010, becoming the first new high street bank in more than 100 years.
But although he had set up other banks previously and has ambitions for Metro to grow to 200 branches in the south east, he doubts he could face applying for a licence to set up a UK bank again.
“I had forgotten how hard it is – I am not sure I would do it again,” he told a Westminster Business Council event.
And he added that he does not believe the regulators are seriously trying to make it easier to get a new licence, instead simply paying lip service to the idea of a more open and competitive industry.
Martin Wheatley and Andrew Bailey – the leaders of the new Financial Conduct Authority and Prudential Regulatory Authority respectively – have both pledged to do more to open up the sector. Their new plans to reduce barriers to entry will be announced in the next month.
“They say they are making it easier, but it is very hard and expensive – it is not at all easy,” said Hill.
But it is not only the UK’s regulators that make his life difficult – the chairman also noted that the EU is responsible for more new regulations than the domestic authorities.