Following confirmation of the number of newcomers given at the FCA’s Future of Banking Conference on 7 September by Nicola Wildman, banking authorities manager for the FCA, a spokesman for the PRA said the approval process could take as little as month or up to just six months.
However, he could not confirm how many were at an advanced stage, adding: “It is difficult to apply a rule of thumb as it completely depends on the business plan and what areas of the market applicants will specialise in. The capital requirements would be quite varied depending on the nature of the bank.”
Names already in the frame include the Royal Bank of Scotland, which said in September it was considering reviving the old Williams & Glyn banking brand after taking £800m in private equity money from a consortium led by Corsair Capital.
One of the MPs driving the challenger bank initiative, Guy Opperman of Hexam, said projects in the north east and Northumberland were already under way.
Bournemouth Council established a pilot community finance initiative in the summer, which offers business loans and mortgages to local people.
However, a similar initiative run by Essex County Council called “Banking on Essex” was closed in 2011 due to poor revenues. It is understood that Anthony Thomson, founder of Metro Bank, is closely involved with establishing a bank for the northeast of England, which is believed to be at an advanced stage of regulatory approval.
The new independent payments regulator will be fully operational by spring 2015.
Alistair Cunningham, IFA at Surrey-based Wingate Financial Planning said: “There is a definite need for credible alternatives to retail banks. But I also think the very nature of these regional banks would mean they are niche and catering to a smaller market.”