New bank opens in UK

Paragon Bank has become the second new banking institution to launch in the UK for the last 100 years after receiving the go-ahead from the Financial Conduct Authority as specialist finance provider Paragon attempts to move into new markets.

This follows the opening of Metro Bank in 2010 and marks a further attempt to challenge the high street giants following the liberalisation of the banking system.

Paragon already operated in the mortgage market, but will now be able to offer savings and loans to UK consumers through its new institution. The bank received an initial capital injection of £12.7 million from its parent company, which is expected to provide further capital while the new bank begins to find its feet.
 
Richard Doe, former chief executive of ING Direct UK, will lead the new bank as managing director.

Nigel Terrington, chief executive of Paragon Group, said this marks the third leg of the company's strategy to expand its financial service offering - the second was the launch of Idem Capital, its debt purchase business.

"Paragon Bank will bring choice and customer focus to the UK banking market, by providing consumers with straightforward, competitive products that are transparent, easy to understand and manage," he declared.

"Initially, Paragon Bank will focus on lending in sectors where Paragon has extensive experience and previous success, in markets which are displaying good growth opportunities."

The company's aim is to establish itself as a trusted partner for both businesses and consumers, concluded Mr Terrington.

There has been something of a public demand for new banking groups to challenge the so-called big five, following the criticisms many large institutions faced for their actions during the financial crisis.

Metro Bank, founded by American Vernon Hill, now has 25 branches in the London area and is aiming to offer some 200 by 2020 as it continues to raise capital and expand its operation.