Anthony Hilton: Vernon Hill’s root and branch approach leaves Metro Bank blooming

Bank has 20 branches and plans to open a new one roughly every month to bring the total to about 200

I did not expect to be impressed with Metro Bank, but in mid-afternoon on a wet Thursday the branch in London’s Holborn was heaving. I have never been in a bank branch like it. There was a genuine buzz. The customers and staff were almost all young. It felt more like an Apple store than a bank. It looked more like one too.

That, of course, is exactly what its American founder, Vernon Hill, is trying to achieve with what is the most significant new bank launch in this country in decades. He believes the bank branch is the heart of banking, the key to the relationship, so he is fanatical about location and how it all looks and feels. The British can be snooty about American-style branding and its gimmicks – for example, dog bowls for those who come with their pets, big M for Metro signs and cartoon characters on the walls – but it seems to be working.

Since coming here in August 2010 the bank has opened 230,000 accounts and new customers are coming in not only faster than he expected, he says,  but faster than in any bank launch ever. He now has 20 branches and plans to open a new one roughly every month to bring the total to about 200, all in Greater London.

It is all costing a fortune, of course, but he did this before in the US, building up what became the 17th largest bank there before he sold out, so money is no object. His mainly American backers have already put in two tranches of £250m and there is more there – or the possibility of stock market listing – if he needs it.

The UK has always been seen as a tough market to crack because the big banks are so dominant and people rarely if ever move accounts. Mr Hill says they will move if you offer something genuinely different. In his case that means a local bank rooted in its neighbourhood – and rooted, too, in what the Americans do so well, namely service and convenience. Thus you can come in off the street and walk out 20 minutes later, not only with a fully functioning account but with the credit and debit cards and even a cheque book that go with it. It is technology which makes it possible. Everything is on screen.

All his customers have a personal contact – what he calls the old fashioned manager – at their branch, and indeed this is the foundation of his lending policy.

“The closer you are to the customer, the less the credit risk in lending to them”, he says. British banks have, of course, long since got rid of their managers; they say they’ve lost the skills and so can’t bring them back.

“That’s just an excuse,” says Mr Hill. “It is harder to teach people to smile than it is to teach them banking skills.”

A bear of little brain? Perhaps that’s unfair

The fun this week was an evening forum where we debated whether skill or luck was the main driver of business success. It was one of a regular series of networking events hosted by The Foundation, a growth and innovation consultancy where I serve as an adviser.

Putting to one side a comment from the former British Institute of Management chief that most of what you needed to know about management can be culled from the pages of Winnie the Pooh, it does seem to me that there is a lot to be learned about business from playing Monopoly. You need to manage cash flow, to invest only to the point of maximum return on capital, not to overpay in negotiations, and to have an awareness of external risk. But the key thing is the combination of skill and luck and the fact that a really bad player can win if he or she consistently gets the roll of the dice. But it does not work the other way: no amount of skill will compensate for unremitting bad luck.

But perhaps there is a better analogy. Business is like poker in that you have to make the best of the hand you are dealt. The cards you get are luck. The skill comes partly from knowing when to bet and when to fold, but it is also vital to understand the strengths and weaknesses and likely behaviour of the opposition. A skilled player will not always win; but they should win more often than they lose.

It’s five years too late for this inquiry into RBS

It’s been a bit hard to avoid banks this week, what with Metro, the Lloyds share sale – which, as I said here back in July, would be timed for just before the Tory party conference – and the Barclays’ rights issue. But the positive news from elsewhere has, I think rather unfairly, pushed RBS on to the sidelines. Conventional wisdom says that it can’t be privatised for years; I suspect that if George Osborne had resisted the temptation to interfere, and not fired Stephen Hester, the share price would be a lot higher today than it is.

From the outside it is hard to appreciate the progress that has been made but at the time of the rescue the bank had some £400bn of what it euphemistically describes as non-core business. Today that total is under £40bn – a mere tenth of what it was, and a number which makes all the more nonsensical George Osborne’s recent decision to interfere still more by launching an inquiry into whether the troubled assets should be hived off into a “bad bank”.

It might have made sense five years ago, but not now that the bulk of that work has been done.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Beverley James: Accounts Payable

£22,000 - £23,000: Beverley James: Are you looking for the opportunity to work...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower