New online bank set to launch

The UK will see the launch of a new online-only savings bank in 2015, as an alternative to the traditional high street institutions.

Charter Court Financial Services (CCFS) has confirmed it will open the new bank within the next three months and it will offer a number of products, such as instant access and longer term savings accounts, as well as savings bonds.

The bank gained its licence to operate in the UK in 2010, but it has faced a number of regulatory hurdles before it can open its virtual doors to customers. It will have no branches and will not be able to offer loans to consumers.

It is expected Ian Lonergan, the current chief executive of CCFS, will oversee the new bank with Philip Jenks, a non-executive director at Leeds Building Society and former chief operating officer at HBOS, acting as chairman.

Mr Lonergan said: “We see the development of a retail banking proposition as a logical extension for our business, enabling it to diversify into new markets and build a sustainable and competitive business model for the future.”

The new institution will be covered by the Financial Services Compensation Scheme, the UK’s deposit protection scheme, which guarantees eligible customers’ deposits up to a maximum of £85,000.

It is hoped the emergence of new banks will increase pressure on the high street to offer better customer service. At present, the UK’s four largest banks – Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland – account for 77 per cent of the personal current account market.

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