This column makes no apology for having been a fan of Metro Bank from day one. Indeed, far earlier than day one.

One of the writer’s easier headlines to write was way back on 28 October 2008, entitled simply ‘Vernon’s Back’ (see screengrab).

That article flagged up Vernon Hill’s plans to launch Metro Bank in the UK. It had been a pleasure to follow the success of CommerceBank in the US.

Hill was a character and he did not duck questions. There was none of the typical bank CEOs insistence that his press team have quote approval. That often means amending and improving upon what was said to what the CEO meant to say.

In brief Hill was a dream for journalists and he was coming to the UK. There was much hostile reporting from those who did not know him.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

He was told by sections of the consumer press that a brash US style branch based business would not get off the ground. More reasonably, many observers questioned the timing of the launch.

Timing of the launch was brave

Looking back more than a decade, the birth of Metro Bank was brave. It was a time of reporting upon Wells Fargo acquiring the failed 3,300 branch-strong Wachovia franchise.  Chase was busy taking over another failed major player, Washington Mutual together with its 2,200 outlets.

Closer to home, RBI quizzed the head of retail policy at the Financial Services Agency about what the financial crisis would mean for future regulation.  That was an easy two pages to fill.

Elsewhere in the issue, the writer spoke with the head of National Australia Bank’s UK franchise and its great ambitions for Clydesdale. That went well with NAB bailing out of the UK and spinning off Clydesdale eight years later.

And of course the issue had to update on the woes of Royal Bank of Scotland. Royal Bank of Scotland shares lost about 87% of their value during 2008. The fateful day was 7 October 2008 when the share price plunged by more than 30%. It was also the day when the chair of RBS told the UK finance minister that the bank was about to run out of money. The £45bn bailout followed.

But that was the backdrop: in the month of the near death experience of RBS, Hill announced plans for Metro Bank.

An unswerving belief in the branch

Hill holds then as now an unswerving belief in the importance of the branch. By the time Toronto-Dominion snapped up Commerce, its branch network had grown to almost 500 outlets from a standing start when Hill opened its first outlet in 1973.

At the same time, Hill advocated investment in the latest IT and was damning – quite reasonably-about his view of UK bank IT systems as being decades out of date.

As a result, Metro Bank’s digital channels measure up to the incumbent banks and in some respects give it an advantage. In no way has Metro focused on the branch to the exclusion of investing in digital.

Moreover, the Hill diktat on building fans has travelled well from the US to the UK.
At the heart of Hill’s retail ethos is a belief in the importance of customer service and a desire to improve the customer experience. He was doing it before it was on the radar of the established banks.

One need look no further than the Competition and Markets Banking Satisfaction Survey results for evidence that Metro got this right.

CMA: Metro Bank success

In August, Metro Bank won top spot in two of the four categories in the CMA survey. Specifically, it was rated the bank people would most likely recommend based on overall service and service in branches.

The CMA results were a fitting tribute to Hill and Craig Donaldson, CEO since 2009.

The Q3 trading update was mixed. But it did contain positives with customer numbers up to 1.9 million, total deposits of £14.2bn and net loans of £14.9bn. Not bad for a ten year old bank.

In October, Hill announced he was standing down. Donaldson’s departure was announced in early December.

To be fair, it has been a torrid year. The year kicked off with a Metro Bank share price of £17.18. It was to peak at £22.02 in late January. Then followed the news that the bank had wrongly classified £900m of loans. As RBI goes to press the share price is £2.00 having been as low as £1.55.

News in early December that hedge fund boss Steve Cohen is reducing his Metro Bank stake is slightly troubling. We may see a sale of part of the Metro Bank lending book to raise capital-a full blown takeover cannot be ruled out.

If Metro is taken private it would represent a regrettable outcome. The writer may be in the minority but remains of the view that Metro Bank would be an excellent buy, trading at a ludicrously low price of about one-fifth of book value.

One thing is for sure-Hill will not be forgotten. I will miss Messrs Hill and Donaldson and am grateful to them for their kindness and patience over the years – they will be hard acts to follow.