GE may be launching online bank

GE Capital, the group's financial arm, hopes to launch in the next 18 months as it looks to attract savings from high street banks, a Sunday newspaper reported.

It recently set up an internet bank in Germany under the name GE Direkt and is believed to be examining opportunities in a number of other European countries as part of moves to diversify its funding base with customer deposits.

The online banking sector, which was launched a decade ago with brand names such as Egg, Cahoot and Smile, lost some of its shine in the financial crisis as a result of the collapse of Icelandic banks such as Icesave.

Banks have also been making more effort to emphasise the appeal of their multi-channel approach of branch, telephone and online services.

Egg was recently put up for sale by its United States owner Citigroup. Cahoot, set up by Abbey and owned by Santander, has been scaled down, the Financial Times said.

New entrants such as London's Metro Bank have put branches at the heart of their recently-launched operations, while larger players such as Barclays and Santander have revamped their high street premises.