Nightclub lounge, cinema foyer or even amusement arcade are just some of the descriptions of the new branch of Metrobank opening this week in Holborn, central London.

Regardless of the looks or the marketing hyperbole, the opening of the first brand new bank on the British high street for more than 100 years is a red letter day for banking. Metro promises a new customer-focused experience, with longer opening hours, seven-days-a-week counter service, easy-to-use change machines and a fast-track current account opening procedure which could see new customers issued with a secure debit card within 15 minutes.

“We asked British consumers what they hate about their banks – from refusing to take change in large batches to constantly selling to them in the branch – and looked to do the complete opposite,” said Metro’s chairman, Anthony Thompson.

To back this up, Metro says that staff bonuses will be linked to levels of customer satisfaction rather than how many products are sold.

“The attitude of the big-name banks has been that the UK marketplace is mature and difficult to make money from unless they incentivise staff through commissions and targets for selling add-on products,” Mr Thompson said. “So you come in with a question about your current account and find that the staff member tries to sell you a credit card or a mortgage as a matter of course. Our staff are paid on how well they meet the customers’ needs, not on selling product.” Significantly, Mr Thompson has confirmed that although the Metro idea is imported from the US, customers will not have to pay US-style monthly fees on their current accounts.

It seems that Metro is targeting small businesses which often have to pay fees for everyday banking facilities such as depositing coins. “The location is interesting as there are lots of small businesses in the locality and the opening hours – till 8pm – and the ability to deposit coins in large quantities easily and without charge will really appeal to these customers,” said David Black, a banking analyst at Defaqto, a financial information firm. For dog-loving Britons, Metro says it will even allow pooches into branches and will be feeding them with dog biscuits.

Metro doesn’t want to stay rooted to one spot for long. It plans to open four branches by the end of this year and eight the next, all inside the M25, and within a decade have a 10 per cent share of the London banking market. Ambitious? It’s been done before in the United States by Vernon Hill, co-founder of Metro, who started with one branch in New Jersey in 1973 and grew Commerce Bancorp to 500 branches by 2007, with £50bn of assets, making it, at the time, the 17th biggest bank in the US. The template was similar to that being envisaged for the UK: attract new customers, usually angered at the service offered by the big boys, with promises of greater convenience and transparency.

But the UK market, which Metro is trying to crack, is more homogenous than the US, with a handful of massive players such as Lloyds Banking Group, Barclays, NatWest, HSBC and increasingly Santander forming a big five grabbing all but a small fraction of customer current accounts – the hub around which other products are sold. The big five enjoy huge economies of scale and are able to offer rates which can attract new customers as well as the advantage of substantial nationwide branch networks. In short, Metro and other potential new entrants have a huge job ahead of them. “It’s a tough task to grab even a proportion of the London market,” Mr Black said. “You need either to have a brand that people recognise and trust or you have to top the best-buy tables in order to really make strides in this country.” But Mr Black added that the “niche” approach of Metro is certainly interesting, tapping as it does into an anti-bank zeitgeist much the same way as First Direct managed to do 20 years ago.

However, when it comes to rates paid on savings and current accounts, Mr Thompson admitted that it will not be the best buy. “We aim to be a consistently high-rate payer rather than offering a headline-grabbing rate that is here today, gone tomorrow.”

Metro isn’t the only likely new entrant into the British banking market. Aldermore, previously a private bank, moved into the high street arena last year and currently offers best buys in the fixed-rate savings market as well as lending £300m to small- and medium-size businesses. Lord Levene, the chairman of Lloyd’s of London, and David Walker from Morgan Stanley said last month that they were trying to raise hundreds of millions from the City to launch Project New Bank based, you guessed it, around supplying better levels of customer service and empowering managers in branches to make lending decisions, as mainstream banks did in the UK until the early 1990s.

Both Tesco and Virgin have said that they want to enter the market and they have, in Tesco’s case, brand strength and branch coverage, and in Virgin’s case huge brand loyalty. “The barriers to entry are enormous in the UK and it’s a difficult task to break through and we have a trusted brand,” Virgin spokesman Scott Mowbray said. Virgin won’t be entering the market until 2011 at the earliest. The reason? “We have to ensure that we give customers the economic imperative to open a current account – which is key, as that’s the lifeblood of your business. At present, only 6 per cent of people switch their accounts a year,” Mr Mowbray said.

Virgin and Tesco, which has long-standing experience in supplying insurance products and the advantage of its Clubcard scheme for building brand loyalty, will be watching Metrobank’s launch closely. “It’s a really interesting development and no one has seen anything yet like Metrobank on the British high street,” said Mr Mowbray. “Much of what they are saying we agree with. For example, there has been for far too long in bank branches a sales culture rather than a professional customer service culture. People want simplicity and ease of access. That’s what the new entrants into the market should be looking to supply.”

And as customer satisfaction with banks is at an all-time low – particularly after the pitched battle over unfair overdraft fees – the will may be there for something completely different.
Compare top offers on 0% balance transfer credit cards at Independent Compare

NEW YORK — The dollar was little changed Friday against major currencies after European Union leaders moved to calm fears of a financial crisis.

The dollar lost ground against currencies in emerging markets as stock markets moved higher, increasing traders’ desire to make riskier bets.

In late trading in New York, the euro slipped to $1.2364 from $1.2379 late Thursday. In overnight trading, it hit a high of $1.2416, its strongest level since late May.

The euro has risen from a four-year low below $1.19 on June 7 after positive economic data from around the world. European leaders’ moves to calm investors, who are worried that increasing public debt will trigger a banking crisis, is also helping bolster the currency.

On Thursday, EU leaders meeting in Brussels said they would publish results of “stress tests” of Europe’s 25 biggest banks in July. The measure will test banks’ financial stability.

“We think this move will promote transparency, allow financially sound banks to seek market refinancing and ultimately instill confidence in European financials,” said Credit Suisse foreign exchange analysts in a research note Friday.

Concern that Spain could follow Greece in requiring financial aid also receded somewhat Friday after a successful bond auction and support from EU leaders.

The real estate market collapse and rising unemployment have left Spain’s regional banking system struggling.

French President Nicolas Sarkozy, noting that he was speaking on behalf of the 27-nation group, said “we don’t believe there is a problem” in Spain.

The threat of a financial crisis spreading across Europe prompted the European Union and International Monetary Fund to put together an emergency financing package in May of more than $900 billion for euro countries.

Spain is a much bigger economy than Greece. A crisis there could have even deeper repercussions for the world economy.

While the euro has been slowly rising this week, analysts question the sustainability of the rally.

“We are still fundamentally bearish on the euro,” said UBS analyst Geoffrey Yu.

In other trading in New York, the British pound dipped to $1.4799 from 1.4810, while the dollar slipped to 90.73 Japanese yen from 90.82 yen.

The dollar edged down to 1.0222 Canadian dollars from 1.0284 Canadian dollars, and fell to 1.1098 Swiss francs from 1.1126 francs. It also lost some ground versus currencies in emerging markets in Latin American and Asia, as well as “commodity currencies” such as the Australian dollar.

Currencies of countries that are big commodity exporters tend to trade higher when investors are reassured by better than expected economic news or developments. A rebounding economy would require more commodity exports.

Royal Dutch Shell PLC said Friday it has agreed to buy East Resources Inc., a closely held U.S. natural-gas explorer, for $4.7 billion, in a transaction that underscores the frenzied global interest in North American shale-gas production.

Warrendale, Pa.-based East Resources is one of the biggest players in a natural-gas exploration area known as the Marcellus Shale, with control of 1.25 million acres across a territory that stretches from West Virginia to New York.

The sale will provide lavish returns for private-equity firm Kohlberg Kravis Roberts & Co., which invested $350 million in East Resources for a substantial stake only 11 months ago. It will also be a boon for East Resources Chief Executive Terrence Pegula, who founded the company in 1983, and still controls it.

Shell’s acquisition also includes mineral rights in the Eagle Ford Shale in south Texas.

While natural gas prices remain depressed, major oil companies are moving deeper into the business, with expectations that gas demand will recover in the years ahead. Last December Exxon Mobil Corp. agreed to buy gas producer XTO Energy Inc. for about $30 billion.

No area is more in demand than the Marcellus, a natural-gas field stretching from West Virginia to New York. It has benefited from big production and relatively low costs, which have made wells profitable and increasingly valuable.

North American natural gas currently accounts for about 7.8% of Shell’s global oil and gas production. Shell has pursued several deals in the North American gas market in recent years, buying Canada’s Duvernay Oil Corp. in 2008, and teaming up with Encana Corp. to develop acreage in Louisiana’s Haynesville Shale exploration area. Shell officials have said they believe that while gas prices are low now, in the long-term they will recover.

Foreign energy companies have moved aggressively on to the scene. Last month, India’s Reliance Industries Ltd. invested $1.7 billion for a 40% stake in a joint venture with Atlas Energy Inc., which controls about 584,000 acres in the Marcellus. In February, Japan’s Mitsui & Co. announced a deal with Anadarko Petroleum Corp. in which it will invest about $1.4 billion to develop shale gas in the region.

The shale investments come with regulatory risks. Environmental groups and some residents of gas-producing areas have become concerned that the drilling process used to extract natural gas trapped in shale formations uses too much water and could contaminate water supplies, a concern that is particularly acute in Pennsylvania and New York. A U.S. House committee is investigation the process, known as hydraulic fracturing,or “fracking,” and some lawmakers have called for increased regulation.

The natural-gas industry insists fracturing is safe and that generating electricity from natural gas uses less water than other power-plant fuel sources.

For KKR, the deal represents a big win as the New York investment firm nears a listing on the New York Stock Exchange. A deal would allow KKR to return money to investors in its flagship $17.6 billion fund as it sets its sights on raising new funds. Separately, Toys “R” Us Inc., the retailer owned by KKR, is expected to file for an initial public offering late Thursday.