A steady stream of customers were greeted with an array of gimmicks. Not only does the bank welcome dogs, it provided them with free biscuits and offered their owners free breakfast.

“We’re in the business of turning customers into fans,” American billionaire and Metro Bank co-founder Vernon Hill told reporters.

Metro Bank aims to have more than 200 branches across greater London over the next decade. It also hopes to end up with a business evenly split between retail and commercial banking, offering a range of services including a Metro Bank-branded credit card.

Its business plan is largely inspired by a retail-focused model used by Hill when he founded America’s Commerce Bank in 1973.

Commerce Bank grew rapidly to become a major force in the US financial industry and was eventually sold to Canada’s Toronto-Dominion Bank in 2008.

“There seems to be a pent-up demand,” said Hill, observing the queues building up within Metro’s flagship branch in Holborn, near London’s financial district.

Curios customers
Metro Bank is one of several new entrants seeking to break into a retail banking sector shaken up by the credit crisis which saw the near-collapse of some of its best-known names.

Britain’s retail bank sector is dominated by the “Big Four” of Barclays, Lloyds, HSBC and Royal Bank of Scotland.

There is also competition from mutually-owned firms such as Nationwide and Spanish bank Santander which owns the Abbey brand.

Metro Bank is the first new start-up, however, to get a licence from the Financial Services Authority regulator.

“I’m not entirely happy with my current bank HSBC. This is a new bank and it promises it will be different,” said Dileepa Ranawake who was planning to open an account.

Gregory Mann was also among the first customers, he was attracted by the long opening hours compared to rival banks.

“These guys are open seven days a week,” he said.

Metro Bank Chairman Anthony Thomson told reporters that the bank had a long-term goal to grab up to 10 percent of London’s retail and commercial banking market and has said the company could list on the stock market in 2013.

More competition
Britain’s changing banking industry promises to become more competitive with various assets sold off from bailed-out groups Lloyds and Royal Bank of Scotland that could attract the likes of Virgin Money and supermarket chain Tesco, which also plans to enter the British bank sector.

Metro Bank has said it is not interested in acquisitions and aims to grow on a branch by branch basis.

Dorothy Armstrong, a senior executive at the banking industry practice of consultancy Accenture, said Metro Bank would have its work cut out.

“While Metro Bank and other expected entrants to the UK banking market, such as Tesco, stand every chance of becoming successful and profitable niche banking businesses over the coming years, it is most unlikely that these new players will gain sufficient scale across the full range of banking services to challenge the dominant five in the high street,” she said.

Critics of Metro said it needed to offer better rates.

Metro Bank is offering a rate of 0.5 percent on its instant access savings account – below the current British inflation of around three percent – and a rate of 15 percent on an overdraft on its current account.

“They’ve got a steady product range but in pretty much every case, you can find a better deal if you’re prepared to look around,” said David Black, a banking analyst at financial research company Defaqto.