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Banking needs not just a new name but a new way of doing things

Lord Levene’s NBNK could appeal to the customers and businesses shunned by big banks

Is bringing more competition into banking going to make the slightest bit of difference to customers? That’s the question being asked by consumers, corporate and personal, as new players prepare to enter the market.

NBNK, the investment vehicle launced by Lord Levene a year ago, is on the verge of buying Yorkshire and Clydesdale banks from their Australian parent.

If all goes according to plan, Levene will then bid for the 600-plus branches that the EU is forcing Lloyds to sell to meet concerns by the anti-trust authorities. And hey presto, we have a new force in British banking.

But do we? None of the parties involved in the auction for Lloyds’ branches or Northern Rock, which the government said it would sell three months ago, have explained how they will stand out from the crowd.

We are told more competition is vital if the banking industry is to get the country bank on its feet. But such remarks will prove to be little more than empty rhetoric if banks still don’t lend to small businesses, continue to pay outsized bonuses to managers, and sit idly by while standards of service plunge further.

Having one or two extra banks isn’t going to make a difference if they all do the same thing.

But there is an opportunity for a new player to carve a niche out for itself. Reinstating bank managers in branches and empowering staff on the high street to make decisions would be a step in the right direction. Another tack would be to show a willingness to lend to firms or individuals that big banks shun: growing businesses in need of working capital, or first-time buyers with prospects, but denied the chance of getting on to the housing ladder.

Last but not least, perhaps a new force in British banking could spearhead a campaign that would make it easier for customers to shift their accounts to a different bank. It shouldn’t be so difficult to move a current account with all its direct debits and standing orders from one bank to another.

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