Business Irish

Friday 18 October 2019

Daniel O'Connell set up a bank. Who will be next?

Tom Molloy

THE Central Bank's Fiona Muldoon said recently that she has not received any applications for a licence to open a bank here since she was appointed and suggested that she was unlikely to see any requests anytime soon.

That should not surprise us too much; the barriers to entry are formidable. Britain has only recently seen the first new bank in more than a century with the opening of Metro Bank which launched in 2010 and published 2012 results last week.

The interesting thing about Metro Bank is how well it is doing. Customer numbers surged in 2012 as the London-based lender tapped into the deep unpopularity of the established banks.

Customer numbers rose by 183pc to 136,000 at the end of 2012 and show no signs of stopping. Customers were up a further 25pc in the first quarter of 2013.

Customer deposits almost trebled to £576m (€680m) last year while the loan book stood at £168m – still small beer by UK standards but an amazing achievement in the midst of a recession.

The creation of new banks during periods of economic turmoil is nothing new. Victorian England was full of banks that rose quickly to meet the specific needs of a certain industry such as the railways or agriculture and then often collapsed again.

Banks were also often the tools of ambitious politicians such as Daniel O'Connell who was a leading light in the foundation of the National Bank of Ireland and almost every branch once hung a portrait of the great man himself.

Today, politicians are so out of touch with commerce that it is impossible to imagine any of them setting up a bank, let alone liberating an entire class of society into the bargain.

Ms Muldoon is probably right to suggest it won't happen here but somebody is probably missing a wonderful business opportunity and some politician is missing a wonderful political opportunity.

Irish Independent

Also in Business