* Five new banks approved
* More than 25 more potential new banks interviewed
* No more changes to regulations after recent easing
By Huw Jones
LONDON, July 7 Britain's regulators have given
the green light to five new banks since easing rules a year ago
for new entrants to challenge the handful of lenders who
dominate the high street.
The Bank of England and the Financial Conduct Authority also
said on Monday that a further more than 25 potential banking
applicants have been interviewed as regulators face pressure
from lawmakers to increase competition in banking.
Opposition Labour Party leader Ed Miliband has said he will
consider limiting the market share of big banks should his party
come to power in next year's election as scandals at top banks
spark calls for more competition.
Just five banks - HSBC, Royal Bank of Scotland
, Barclays, Lloyds and Santander UK
- still account for more than three-quarters of lending
despite several challengers entering the market in recent years.
The five new banks that have just been authorised are: Axis
Bank, Union Bank of India, FCMB, UBA Capital, and Paragon Bank.
They join other recently-launched names like TSB, spun off from
Lloyds last month and emerging as a credible challenger with 4.5
million customers, as well as Virgin Money and retailer Tesco
, Aldermore and Shawbrook.
Back in 2010 Metro Bank became the first new lender to
emerge for over a century, highlighting in difficulty of
launching a new bank.
Regulators have since made it easier for new banks to get
off the ground, relaxing some rules in March 2013, while
insisting basic safeguards remain in place, such as protections
on customer deposits.
A new bank now only needs a million pounds in capital
compared with the previous minimum of five million pounds.
Authorisation of top officials has also been fast tracked.
"It is clear that the changes introduced last year have been
positive for new entrants and will make a contribution to
increasing competition and thus benefit customers," Andrew
Bailey, chief executive of the BoE's Prudential Regulation
Authority, said in a statement.
In the latest pre-application meetings, regulators met more
than 25 more potential lenders, ranging from retail to wholesale
banking and payment services firms.
"In any sector newcomers to the market bring fresh thinking,
and challenge established firms to consider how they can offer a
better deal or improve the service they offer," said Martin
Wheatley, chief executive of the Financial Conduct Authority.
Regulators do not plan to introduce any further measures to
lighten requirements for entry to the banking sector.
Andrea Leadsom, a junior UK finance minister, said
regulators are meeting the challenge set by government to
increase competition in banking.
"Critical to our long term economic plan is getting new
banks into the marketplace, and today's report shows we are
doing that. This is good for customers and good for the banking
industry," Leadsom said in a statement.
Separate steps to increase competition have been introduced,
however, such as making it easier and free to move a bank
account - though switching rates are still low - and the setting
up of a new regulator to oversee bank payments systems, to
ensure fair access for new banks who typically have to use the
payment systems set up by the big lenders.
(Reporting by Huw Jones; Editing by Sophie Walker)