The arduous journey to create a new private bank in Scotland is almost over. Hampden & Co, which occupies the magnificent Georgian offices at 9 Charlotte Square, in Edinburgh, are putting in place the final touches ready to welcome clients. The only stipulation is that you have a sizeable chunk of personal wealth that requires specialist banking.
For those not suitably financially endowed, the establishment of a new private bank, after the banking travails of the last eight years, is still a cause for celebration in Scotland.
It is a remarkable personal achievement for Ray Entwistle who set up Scoban, now renamed Hampden, after a distinguished career with Adam & Company, based in Charlotte Square, which became part of the Royal Bank of Scotland.
The new bank has 250 shareholders, including two major investors, who will be opening their accounts in the coming weeks.
The chief executive is Graeme Hartop, who moved over from Scottish Widows Bank, where he built a niche yet profitable division over 20 years within the massive Lloyds Banking Group. Hartop was given plenty of room and autonomy to build the Scottish Widows’ outfit, now he must repeat the trick with Hampden, a more exclusive offering.
He explained to BQ that the UK regulatory authorities recognised that there were challenges for new banks to meet the levels of compliance and asset ratios and this was hampering the ability to build new ‘contender’ banks in the UK. Only a handful of new entrants, such as Charter Savings and Paragon have emerged.
Instead, a ‘mobilisation’ road map was set up by the Prudential Regulatory Authority which involved setting out the shape of a new bank. This was about ensuring key senior personnel were in place, there was a robust business plan, and key documents on risk and operations where submitted for regulatory approval. In Hampden’s case, the two regulators gave a green light to continue on the mobilisation period to build up the systems and procedure for a licence to run a UK bank.
Much of the early groundwork in attracting investors was done by chairman Ray Entwistle, but then it was Mr Hartop’s task to ensure that all the banking facilities were in place. “We were the first greenfield bank to go through this mobilisation process. It has been a huge learning curve for us – but we’re delighted with the progress we’ve made,” says Mr Hartop.
One of the keynote investors is Tim Oliver, originally a Lloyds’s of London broker, who set up the Hampden Group in the early 1970s. He bought Hampden House in Buckinghamshire, the home of Sir John Hampden, the English patriot who challenged the autocratic authority of Charles 1 which heralded the English Civil War.
Of course, Scottish sports fans know Hampden Park in Glasgow as the home of the national football team. Hampden, with group assets of £60m and £2bn, took a leading stake last April.
The key team is Andrew Milligan, finance director, Stewart Alexander, as chief operating officer, Jeremy Vaughan, as managing director of banking in London, Alison Inverarity, as chief risk officer.
Mr Hartop joined in January 2013 and in the following two years has been working to raise funds, build the banking platform and gain the regulatory approvals. “This was the most uncertain element. The banking industry had to understand how to invest in a new start-up. One of the trickiest aspects was finding the right shareholders and getting the synergies. We’re delighted with the progress that’s been made.”
Mr Hartop, a former Borders rugby player, is a polite, yet cautious banker to the core, and has signed a deal with IT group Oracle to provide the banking platform. “It’s a tried-and-tested platform that has been customised for our needs and will be run from Oracle’s data centre in Linlithgow. RBS will undertake the clearing on our behalf.”
Hampden will offer the full services of a private bank with charge card rather than credit card. The clients will be high net worth individuals, with family and smaller commercial interests. Each banking manager will have a number of clients, all able to phone their managers to discreetly arrange transactions.
Is there a minimum amount required to open an account? Mr Hartop explains that the bank will hold accounts for family members of wealth individuals and successful entrepreneurs, so levels of assets will vary.
“In essence, we are all about an exceptional level of personal service, where we know the clients and their families personally. For this kind of service, you would expect to pay a bit more,” he says.
Hampden & Co, with its office in Edinburgh and a planned office in St James in London, will certainly be a welcome addition to Charlotte Square.