Masthaven Finance, which offers specialist mortgages and loans, said it has submitted its banking licence application and hopes to launch next summer.

A string of new challenger banks have entered the UK market recently including RCI, Charter Savings and Oak North.

A MoneySupermarket report published this week found that high street lenders have seen their share of savings customers fall to 48 per cent this year, a total loss of eight percentage points on 2014’s figures, as consumers turn to challenger banks offering more attractive rates.

Kevin Mountford, head of banking at MoneySuperMarket, said: “Traditional banks aren’t fighting for our money, so the ever increasing number of new entrants in the market is good news.

“Competition is already improving and we are seeing a significant increase in the savings rates being offered by these alternative banks. Many UK savers have their money in accounts with average rates less than the Bank of England Base Rate, but right now they can switch to an account with a higher rate of interest and earn three or four times as much from their money.  With Masthaven Finance applying for a banking licence, I’m hopeful we are going to see even more consumer-led products and innovation in the market.”

Masthaven Bank will offer online fixed-interest savings products and specialist mortgages.

Jon Hall, who will lead Masthaven Bank as managing director, said: “This is a hugely exciting time to launch a new retail bank in the UK. For too long, savers and borrowers have had to dance to the tune of the big banks. The Masthaven approach will be different, recognising that ‘no one size fits all’ and that everyone’s individual financial backgrounds and requirements vary.”

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