Conister Bank is the first Isle of Man lender to receive a UK deposit licence.
The Prudential Regulation Authority has approved the branch of Manx Financial in Basingstoke in Hampshire to accept deposits. This will further increase competition on the market for savings rates.
Conister Bank is the subsidiary of Manx Financial, listed on Aim.
Conister will benefit from the new funding, and the move will also broaden the savings market, in Britain where banks are under pressure to offer better deals to their depositors. Ministers and regulators have urged banks to increase the interest rates they pay for deposits, amid concerns that some lenders are treating their customers unfairly.
In its fight to control inflation, the Bank has increased its base rate from a low of 0.1 percent in November 2021 up to a high of 5,25 percent. The rates that commercial lenders pay on their deposits have increased slower as they seek to increase profits. Jeremy Hunt warned the industry to hurry up and pass on the rate increases to savers. Financial Conduct Authority also tightens up on the market. Moneyfacts, a data provider, says that this pressure has led to a rise in savings rates. According to Moneyfacts the average rate for easy access is now 3.21 percent and the average fixed-rate deal of one year is 5.39 percent.
Manx’s business ranges from its Edgewater financial planner unit to payments, broking and the hire purchase market. Conister, a unit that dates back to 1935, currently offers 5.4 percent for a fixed deposit for one year of at least £5,000.
Douglas Grant, Manx’s chief executive, has said that the rates they will offer for their upcoming British product might not be the same as what it paid on the Isle of Man. He said that Conister would set rates in each jurisdiction to attract the deposits it needs.
Conister will be able to better match its deposit funding with where it lends thanks to the UK license. Conister lends 78 percent of its money in Britain even though it receives 100 percent of its funding from the Isle of Man.