Big-hitters to launch new bank this month
An investment vehicle run by a team of influential bankers and politicians, NBNK, will begin building a banking empire when it floats on London’s AIM later this month.
Lord Levene, the 68-year-old chairman of Lloyd's of London and former government advisor, is raising £50m to recruit more big names and buy some branches as a launch pad for bigger things.
His well-connected board is expected to have Northern Rock’s so-called “good bank” on its shopping list, alongside the 600 branches the EU has told Lloyds it must sell for accepting bail-out funds from the British government.
“The company intends to focus on the acquisition of a large, established, high quality banking business to be funded by a further substantial fundraising,” according to listing particulars published Tuesday.
It’s thought the business, due to start trading on 18 August, may be able to bring in as much as £4bn from a public offering to bankroll its ambitions.
Sir David Walker, two-times chairman of Morgan Stanley, will put his experience to good use as deputy chairman, while former Tory MP and Secretary of State for Scotland, Lord Forsyth, ex-EU internal markets commissioner, Charlie McCreevy, and Lord McFall, who stood down as a Labour MP at the last election, make up a formidable squad of directors.
No doubt McFall will ensure a steady ship, having chaired a Treasury Select Committee inquiry into the banking crisis, grilling disgraced RBS chief Sir Fred Goodwin, and attacking the City’s excessive bonus culture.
But competition on the high street is already fierce and it’s tough for all the retail banks right now. Northern Rock’s “good bank” lost almost £143m in the first half of 2010 as retail deposits fell by £2bn, or 10%.
High-flying Spanish lender Santander swept into the UK six years ago with the acquisition of Abbey National, followed by Alliance & Leicester and Bradford & Bingley four years later.
Its £2bn purchase of a 300-strong chain of Royal Bank of Scotland branches, expected to be rubber-stamped today, will give it the fourth biggest network in the country.
Meanwhile, Metro Bank, the first new lender to hit the high street in over 100 years, has ambitions to open more than 200 branches within a decade, and building society Kent Reliance will have added firepower after JC Flowers agreed to pay £50m for a 40% stake.