Up to 30 lenders waiting for green light from FSA
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As many as 30 new lenders could be waiting in the wings to enter the mortgage market, Mortgage Strategy understands.
Sources estimate that the number of firms waiting for the FSA to grant the necessary banking licences to allow them to become lenders could be anywhere between 15 and 30.
An FSA spokeswoman would not reveal the number of banking licence applications that are waiting to be authorised.
She would only confirm that 10 firms have applied for licences this year and that four have withdrawn applications.
She says it takes an average of six to 12 months for a licence application to be approved.
But Hector Sants, chief executive of the FSA, revealed earlier this month that the regulator has purposely deterred several new entrants to the market.
One source says: “The FSA has made it clear it is looking to raise the entry barrier.
“I would not be surprised if there were 30 applications for banking licence permissions pending because the regulator is looking at applications in considerably more detail than before.”
One lender waiting to secure a banking licence is Metro Bank. It is reported to have plans to open about 200 branches in the Greater London area in the next 10 years and advertising banners have appeared in at least two locations carrying the slogan ‘Love your bank.’
A spokeswoman for Metro Bank says the lender is “very close” to obtaining a licence from the regulator, having applied for one in early 2008.
It is hoped the licence will come through in time for the bank to launch in Q1 2010, but the spokeswoman would not comment on whether the bank will be offering mortgages.
She adds that whatever products the lender offers will only be available through the direct channel.
Metro Bank was set up in November 2007 by US entrepreneur Vernon Hill and Anthony Thomson, chairman of marketing body the Financial Services Forum.
As chairman of the lender, Hill owns 75% of the company’s shares with the remaining stake belonging to Thomson, who is vice-chairman of Metro Bank.
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