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London - British startup lender Charter Savings Bank was cleared on Wednesday to start taking deposits as authorities try to encourage the formation of new banks to take on the dominant "big four".
The award of a banking licence to Charter Savings comes after Britain last year made it easier for new banks to launch, cutting the length of time it takes to apply for a licence and lowering the amount of capital new banks must hold.
The new bank's parent company Charter Court Financial Services, was founded in 2008 and is majority-owned by US hedge fund Elliott Associates. The Wolverhampton-based business employs 250 staff and will run Charter Savings Bank alongside its Exact and Precise mortgage brands.
Chief Executive Ian Lonergan said that the bank, which will save on start-up costs by not having branches, plans to take customers from bigger rivals by offering better rates. Many British savers have become disillusioned by the savings rates offered by established financial services firms.
The bank will begin offering products including fixed rate bonds and savings accounts from March.
Lawmakers and regulators are keen to see challengers appear to break the grip of Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC, which account for more than three-quarters of lending to individuals and small businesses.
