Banking Competition Remedies (BCR) has today awarded Metro Bank £120m in funding, the highest award from the £775m Alternative Remedies Package aimed at boosting competition in the UK SME banking sector.
The Alternative Remedies Package is a £775m package funded by Royal Bank of Scotland (RBS) as part of conditions attached to its £45bn government bailout – which amounted to state aid – during the 2008 financial crisis. The package comprises two measures:
- the £350m Incentivised Switching Scheme to help SME customers at RBS switch to challenger banks; and
- the £425m Capability and Innovation Fund to support challenge banks invest in their capabilities to better compete in the provision of banking services to SMEs.
The BCR is an independent body appointed by HM Treasury to award the funds. Today’s announcement marks the award of Pool A of the Capability and Innovation Fund, the first tranche of funding. Starling Bank was awarded £100m and ClearBank £60m.
Metro Bank will use the funds to expand into the North of England, by opening new stores in Manchester, Leeds, Sheffield and Liverpool. It will also invest in its digital capabilities to offer SMEs a range of new banking services. Craig Donaldson, chief executive of Metro Bank, said: "Securing this award from BCR allows us to accelerate our plans to revolutionise banking for SMEs. It will help us bring much needed competition to the underserved SME hotspots in the North, while investing in our digital capabilities and creating new jobs.”
Frontier Economics supported Metro Bank throughout the BCR process providing competition and strategic advice on its bid, including conducting a competition impact assessment of its initiatives.
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