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Fresh competition for high street banks as RCI secures licence

Cherry Reynard
Written By:
Cherry Reynard

French bank RCI has secured a UK banking licence, meaning customers’ deposits are now protected by the UK’s Financial Services Compensation Scheme (FSCS).

As Groupe Renault’s dedicated finance company, it started out offering car finance. It was the first to move into the UK savings market and has been operating there for almost four years

Its Freedom Savings account currently has a rate of 1.42%; its one year fixed account sits at 1.71%, while its two year is at 2.11%. This compares to a current top rate of 1.96% for a one year fixed from Close Brothers Savings (source: Savings Champion) and 2.26% from PCF Bank for a two year fixed account.

The newly-authorised UK entity RCI Bank UK Limited will trade as RCI Bank and operate under the control of a newly established board of directors.

Jean-Louis Labauge, chief executive officer of RCI Bank, said: “We have been in the UK savings market for almost four years and are committed to our future here. We had the opportunity to strengthen our roots in Britain and are absolutely thrilled that we’ve now secured our UK banking licence. Nothing changes for our customers, except the protection of their deposits simply moves to the FSCS and our footprint in the UK market is further strengthened.”

RCI’s licence comes at a time when a number of other groups are also securing licences, putting pressure on high street banks. For example, Chetwood Financial and peer to peer lender Zopa secured banking licences in January and December respectively, while currency exchange group Revolut secured a European banking licence last year.