Industry figures welcome M&S Bank launch
Marks & Spencer’s new high street bank will inject competition into an industry dominated by a handful of large players, industry leaders and politicians have said.
Andrew Tyrie MP, the chairman of the Treasury select committee, said that “anything offering the prospect of increasing competition in the high street for financial services must be welcomed”.
He said: “We don’t have enough competition as a succession of reports including that by the select committee has shown.”
M&S Bank will be launched this summer and 50 branches will be opened in the next two years, creating 500 jobs in the UK by the end of 2013. Current accounts will be available by autumn 2012, and mortgages will be offered next year.
Branches will be open seven days a week with opening hours twice as long as traditional high street banks.
The bank will add to M&S Money’s existing products, including credit cards, loans and savings.
Asked if M&S Bank will work through IFAs, a spokesman said: “I don’t think there are any plans yet.”
A spokesman for the Council of Mortgage Lenders, said: “We support the idea of new lenders entering the mortgage market. Increasing the number of lenders and products would promote healthy competition and increased mortgage market activity.”
Andrew Hannay, director of Edinburgh-based Robson Macintosh and Company, said: “Clients will trust the name. It’s a wonderful opportunity for someone new to come in and actually behave professionally, treat customers fairly and offer a top-quality service.”
Mr Hannay added that he would deal with M&S Bank if it worked with IFAs and said a mortgage proposition “could be a good thing”.
Jason Witcombe, director of London-based Evolve Financial Planning, said M&S Bank would attract many customers who trusted the brand and were fed up with the traditional banks.
He said: “The proof will be in the banking and mortgage rates. M&S Bank could become a big player.”
Marc Bolland, chief executive of Marks & Spencer, said the bank would “put the customer at the heart of the proposition” and deliver a service that set it apart from the competition, giving customers a credible alternative choice.
A spokesman for M&S Bank said the aim was to create a relaxed, modern banking environment, with personal touches such as furniture and fresh flowers in branches.
She said: “This is not a ‘bog standard’ retail high street bank. You can go in, sit down and have a coffee.”
Retail banking in the UK has seen few new entrants in recent years with the likes of Tesco Bank, Aldermore and Metro Bank.
Tesco Bank has faced problems with its mortgage and current account launch. In 2010 the group said it expected to offer savings products and mortgages by the end of 2011. This has not yet happened.
A spokesman said: “We’re in final stages of setting up mortgage operations. Current accounts are a key part of our strategy.”