INTERVIEW
Metro Bank is set to become the next big name in franchise business lending. Katie Shevlin meets founder and chairman Vernon Hill II
I
n 1973, aged just 26, Vernon Hill II set out to revolutionise the retail banking customer experience. Vernon obtained a bank licence, $1.5million in capital and nine staff members. Growth was steady, and over 33 years Commerce Bank
expanded from one location to 435. Vernon slowly refined the model, turning the relatively mundane business of banking into an exciting retail enterprise. When he sold the company in 2007, Commerce Bank was the 18th largest bank in America, reporting growth of 25 per cent year on year. Vernon launched the UK equivalent, Metro Bank, in 2010, and it has proved a huge success thus far.
“Not only do Metro Bank allow your dog in, they’ll know their name, give them a treat... they’ll even chip dogs in-branch”
After he sold Commerce Bank, Vernon had a friend in the UK who told him he had to bring his service and convenience model to London. According to the friend, the banks here had “lost the plot”. So Vernon got on a plane to London and began the quest to develop a brand new retail bank for the UK market – the first new one in over 100 years. The company faced a number of challenges in simply getting the model off the ground: could they get a bank licence? Could they recruit top management? Could they build a modern IT system? Could they raise the money? The answer was a resounding yes, and Metro Bank opened its first store in the summer of 2010. Commercial business has proved stronger for
Metro Bank than consumer business. “There is a tremendous demand for commercial credit and not much supply. Our basic message is: you get an old-fashioned banker, you know them, they know your business.”
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Vernon was a Burger King franchisee for 30 years, and he is passionate about Metro Bank’s franchise finance offering. He enthuses: “We like lending money for expansion and operation, and we particularly like lending for a piece of land on which to build a new store.” As with the rest of the Metro Bank concept, it is very relationship-focussed. Vernon’s other experiences of the retail industry have greatly influenced the way he approaches banking; during his time (pre- Commerce) working with clients developing new sites for expansion, Vernon learnt the importance of brand and building fans. “My first client was McDonald’s. I saw that they make money on every consumer; they don’t worry about high transaction prices, and they are consistent in their delivery within every store across America.” With Commerce Bank, and later with Metro Bank, Vernon set out
to implement the fast-food industry model of service and convenience, and a focus on the customer experience into the banking environment. Metro Bank represents a stark departure
from traditional banks, even preferring the term “stores” to “bank branches”. In fact, all the elements of Metro Bank, from the bright colours in stores, to the motto “Love Your Bank At Last” are not subtle, and much at odds with the other high-street banks, but perhaps this was the smartest way for a brand new bank to compete – reinvent the concept. Loud colours aside, the Metro Bank approach feels extremely fresh. Vernon sums it up: “We have the best locations in the best towns, we’re open seven days a week, we’re open 8am to 8pm, it’s open, it’s friendly, it’s fun. You can open an account in 15 minutes or less. We deliver online, we deliver mobile, and a human
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