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A return to relationship banking

Bank branches have been disappearing from the high streets at an ever-increasing rate. Banks argue that fewer people visit physical branches as the use of online and mobile banking rises.

According to Which? banks and building societies closed or planned to shut 3,509 branches since January 2015.

A start-up bank based in Newcastle is set to reverse the trend of bank closures and promises a return to relationship banking where customers can speak to staff in their local branch. GBB aims to fill a gap in the market by targeting lending at small and medium-sized businesses. It will be a proactive lender where each customer can build a relationship with the local manager.

GBB has already promised to support experienced regional developers and construction companies across the North with loans of up to £5m. To help create opportunities for growth across the North, the bank was established to fund up to 25,000 homes over the next five years.

The government has identified a lack of development finance as a barrier preventing smaller builders from delivering more and a new bank, GBB, is aiming to bridge the gap for SME property developers and construction companies.

For savers, highly competitive fixed-rate deposit rates will ensure strong appeal and that customers achieve competitive returns.

The success of GBB will depend on its ability to attract new customers and build lasting relationships. Without the multi-million-pound advertising budgets of the high street banks, it will rely on word of mouth to build its brand and customer base.

Relationships sit at the heart of GBB. Led by an experienced management team and has formally applied to the Prudential Regulation Authority (PRA) for a licence to trade as a bank. It intends to provide tailored lending to regional SME property developers for both residential and commercial property development, and fixed-rate savings products to retail customers.

Relationship banking is proven to help build customer loyalty and provides a single point of contact for a range of different products and services. It offers products tailored to each customer to help them achieve their business goals.

Each branch of GBB will operate locally and understand the local market and community. Decisions will be made by the staff that customers meet every day, and this will allow for more proactive lending and broader support for business.

The property development fund GBB will launch is part of an overall lending plan of £2.9bn with around £2.6bn dedicated to supporting regional property developers and small construction companies. A total of £2bn will be lent across the North, Midlands and Scotland.

Chief Lending Officer for GBB Stephen Henman, said: “Our key differentiator is our relationship-centred approach, which is unlike anything else on the market. A regional and property development focus will be combined with specialist underwriting capabilities, local knowledge and market-leading, cloud-based technology to puts clear water between other providers and us.”

Experienced Relationship Managers will be dedicated to understanding customers’ finance requirements and supporting their ongoing needs.

Steve Deutsch, GBB Chief Executive concluded: “We believe GBB can make a real difference to the local economies it operates in and bring back the close connection people used to have with their bank managers.”

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