Vernon W. Hill II (born August 18, 1945) is an American businessman, the founder and former chairman of Metro Bank, a UK retail bank with 77 stores, and assets of £7.4b ($10.6b). He was also the founder, former chairman, president and CEO of
Commerce Bancorp
Commerce Bancorp was a Cherry Hill, New Jersey–based bank created in 1973. In 2007, it was purchased by Toronto-Dominion Bank, which merged Commerce into TD Banknorth, the latter of which was rebranded to TD Bank.
History
The company was fou ...
of
Cherry Hill, New Jersey
Cherry Hill is a Township (New Jersey), township within Camden County, New Jersey, Camden County, in the U.S. state of New Jersey. As a suburb of Philadelphia, the township is part of the South Jersey and Delaware Valley regions. Cherry Hill ...
, and chairman of pet insurance firm Fetch Inc. In 2016, Hill was named chairman of Philadelphia-based
Republic Bank
Republic Bank Limited is a Caribbean financial institution headquartered in Trinidad and Tobago. It has operations in Anguilla, Barbados, the British Virgin Islands, the Cayman Islands, Dominica, Ghana, Grenada, Guyana, Saint Kitts and Nevis, St. ...
.
Early career
Although known for banking, Hill's business outlook has been informed by early encounters with retailing. While taking morning classes at Wharton, Hill worked afternoons at a
South Jersey
South Jersey, also known as Southern New Jersey, comprises the southern portion of the U.S. state of New Jersey. It is located between Pennsylvania and the lower Delaware River to its west, the Atlantic Ocean to its east, Delaware to its south, ...
bank owned by a local car retailer, where Hill observed the car dealer applying retail principles to banking operations, such as late opening hours. The job also brought Hill into contact with other local retailers, including
McDonald's
McDonald's Corporation, doing business as McDonald's, is an American Multinational corporation, multinational fast food chain store, chain. As of 2024, it is the second largest by number of locations in the world, behind only the Chinese ch ...
. After graduation Hill founded a real estate firm to find and develop sites for McDonald's, a task which required Hill to drive McDonald's entrepreneur
Ray Kroc
Raymond Albert Kroc (October 5, 1902 – January 14, 1984) was an American businessman who was instrumental in turning McDonald's into the most successful global fast food corporation by revenue. He purchased it from the McDonald Brothers in ...
on scouting trips. Hill claims his experience with McDonald's taught him the importance of standardised presentation and scale economies in retailing.
''Philadelphia Magazine'' reported that Hill's experience with McDonald's led directly to the creation of Commerce Bank. Referring to the creation of Commerce, Morton Kerr, chairman of the board of Markeim-Chalmers, Inc., a South Jersey real estate firm, and one of the original Commerce board members, observed:
"A lot of us knew Vernon from being involved in real estate at that time…He was a 26-year-old kid who called about 15 of us to a meeting in his office. I'll never forget it. He said, 'We're going to start a bank.' And he said we'd each have to put up between $25,000 and $125,000. This was 1973-who had that kind of money? But he'd arranged for all of us to borrow it. If you could put up $100,000, he got us loans for $80,000. Only seven of us didn't get up and walk out, but we still thought he was crazy."
The deal resulted in Commerce opening its first branch in
Marlton, New Jersey
Marlton is a census-designated place (CDP) located within Evesham Township in Burlington County, in the U.S. state of New Jersey.
Commerce Bank's economic model rested on the idea that the fixed costs of a bank branch are largely independent of volume, and so profitability lay in maximizing the number of deposits and accounts per branch. Additionally, Hill believed that the industry's reliance on internet banking had led to dis-investment in bank branches, to the detriment of consumers who prioritised in-person service.
“Other banks decided to push consumers out of the branch because it is the high-cost delivery channel. They wanted to push them online. We totally reject that. You can't name me one retailer in this country that has pushed people where they don't want to go and succeeded...We have some branches that get 100,000 customer visits a month; the average branch gets 40,000. An average McDonald’s gets 25,000 per month.”
Hill's motto for Commerce was “America’s most convenient bank”.
Commerce Bank staff were awarded $5,000 if a nearby rival bank closed its branches; hundreds of mystery shoppers made tens of thousands of store visits annually, and salary increases were based on mystery shopping scores. Top-performing managers were given sports cars.
On June 29, 2007, Hill resigned as chairman and CEO of Commerce Bancorp after the
Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to corporate charter, charter, bank regulation ...
, the
Federal Reserve Bank of Philadelphia
The Federal Reserve Bank of Philadelphia — also known as the Philadelphia Fed or the Philly Fed — headquartered at 10 Independence Mall in Philadelphia, Pennsylvania, is responsible for the Third District of the Federal Reserve, which cover ...
and the board of directors of Commerce Bancorp established governance to stop doing business with firms under the control of Hill's family. Notable business dealings with insiders included property leases with entities in which Hill was a partner, and the purchase of services from an architectural design business run by his wife, Shirley. No charges were brought.
On October 2, 2007, Commerce Bancorp announced that it would be merging with TD Bank Financial Group. The Canadian-based
Toronto-Dominion Bank
Toronto-Dominion Bank (), doing business as TD Bank Group (), is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. The bank was created on February 1, 1955, through the merger of the Bank of ...
acquired Commerce for $8.5 billion (U.S. dollars) in cash and stock, at $42 per share of CBH stock, a purchase multiple of x28. Some industry commentators held that Hill's departure and a strong Canadian dollar had made a takeover inevitable.
Petplan
Hill is chairman of Fetch Inc., a pet health insurance company founded by Chris and Natasha Ashton. It holds the U.S. and Canadian franchise from British pet insurance firm
Petplan Petplan may refer to:
* Petplan UK, British pet insurance firm
* Petplan Australia, Australian pet insurance firm
* Fetch by the Dodo, U.S. pet insurance firm formerly known as Petplan
{{disambiguation ...
, the world's biggest provider of policies for pets. Hill invested in the company in April 2008, believing pet health to be a growth market in the USA.
Speaking to ''
Fortune
Fortune may refer to:
General
* Fortuna or Fortune, the Roman goddess of luck
* Luck
* Wealth
* Fate
* Fortune, a prediction made in fortune-telling
* Fortune, in a fortune cookie
Arts and entertainment Film and television
* ''The Fortune'' (19 ...
'' in 2010, Hill said, "People used to put down their pets when they got sick. Now they're members of the family. People will want to save them with kidney transplants and hip replacements. This business will be huge."
Metro Bank
Metro Bank UK was launched in London in July 2010, with Hill as co-founder and vice-chairman.
Press commentary at the time centred on Metro being the first high-street bank to open in the United Kingdom for more than 100 years, and upon Hill's belief that the competitive landscape of British banking amounted to a commercial opportunity to lead on service rather than price. In 2010, 85% of the UK market for current accounts was held by the "big five" banking institutions (
HSBC
HSBC Holdings plc ( zh, t_hk=滙豐; initialism from its founding member The Hongkong and Shanghai Banking Corporation) is a British universal bank and financial services group headquartered in London, England, with historical and business li ...
,
Barclays
Barclays PLC (, occasionally ) is a British multinational universal bank, headquartered in London, England. Barclays operates as two divisions, Barclays UK and Barclays International, supported by a service company, Barclays Execution Services ...
,
Royal Bank of Scotland
The Royal Bank of Scotland Public Limited Company () is a major retail banking, retail and commercial bank in Scotland. It is one of the retail banking subsidiaries of NatWest Group, together with NatWest and Ulster Bank. The Royal Bank of Sco ...
, Santander and Lloyds). In 2008, an official report from the Office of Fair Trading concluded that UK banking was subject to weak competitive pressures and profit-maximising strategies. ''Forbes'' magazine described Metro at launch as "...aiming to disrupt a storied industry dominated by a handful of established players".
In a ''
BBC News
BBC News is an operational business division of the British Broadcasting Corporation (BBC) responsible for the gathering and broadcasting of news and current affairs in the UK and around the world. The department is the world's largest broad ...
'' interview, Thomson commented that the cost–driven model of traditional British banks required them to discourage customers from visiting branches, whereas Metro Bank's model actively sought to attract customers into branches, using tactics such as longer opening hours and pet-friendly policies.
The pair spent a further two years securing a £75m launch investment, including funds from New York real estate developer
Richard LeFrak
Richard S. LeFrak (born 1945) is an American billionaire businessman. He is chairman and CEO of LeFrak, a privately held, family-run company based in New York City that owns, develops, and manages real estate. He is one of the biggest landlords i ...
, property investors the Reuben brothers and Fidelity, the fund management company. Metro was launched with plans to open 200 branches in London by 2020. Twelve branches were opened by December 2010. In June 2012, the company announced the completion of a £126m round of capital-raising to open further branches in London, including funds from Moore Capital and the billionaire investor
Steve Cohen Steve, Steven or Stephen Cohen may refer to:
Sportspeople
* Steve Cohen (gymnast) (born 1946), American Olympic gymnast
* Steve Cohen (judoka) (born 1955), American judoka and Olympian
* Steve Cohen (wrestler) (born 1963), South African wrestler be ...
.
The noted investor Wilbur Ross commented, "The question is whether ill’spromotional flair and service concept will produce enough customers to offset the extra operational cost of providing the extra space".
Hill, who previously served as Metro's vice chairman, replaced his co-founder Anthony Thomson as chairman in January 2013.
In September 2013, Metro had 225,000 accounts and was opening a new branch every month with a goal of opening 25 by the close of the year.
In April 2013, Hill was awarded the
Institute of Economic Affairs
The Institute of Economic Affairs (IEA) is a British right-wing free market think tank, which is registered as a charity. Associated with the New Right, the IEA describes itself as an "educational research institute", and says that it seeks to ...
' Free Enterprise Award, whose previous winners include
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013), was a British stateswoman who served as Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party (UK), Leader of th ...
and Sir
Richard Branson
Sir Richard Charles Nicholas Branson (born 18 July 1950) is an English business magnate who co-founded the Virgin Group in 1970, and controlled 5 companies remaining of once more than 400.
Branson expressed his desire to become an entrepreneu ...
, for his work at Metro. The IEA noted that Hill "has identified a clear opportunity and entered the UK banking scene at a time when the sector has been under constant fire" and showed "incredible perseverance and imagination", while IEA director general Mark Littlewood praised Metro Bank as "a shining example of innovation improving people's live. It's refreshing to see more competition and choice in the banking sector on our high streets".
In August 2013, Tom Brown of Bankstocks.com wrote, "So Vernon Hill has, not once, but twice, and in two different markets, built growth machines in the supposedly mature and sleepy banking business. That has to make him the world’s greatest growth-oriented banker, probably of all time." In the same month, Hill received the 2013 ''Stevie Award for International Chairman of the Year''.
In 2018, Hill faced criticism when it was reported that Metro Bank had engaged his wife's architecture firm, paying it £21m in fees, and also for his use of a £120,000 per year company expense allowance.
Hill stepped down as chairman in October 2019. He remains on the board as a non-executive director, and will leave the board officially at the end of 2019.
Republic Bank
Hill became chairman of
Republic First Bancorp
Republic First Bancorp, Inc., doing business as Republic Bank, was a Philadelphia-based bank from 1988–2024.
History
In 2008, the bank shifted from commercial banking to retail banking. In 2016, the bank named Commerce Bank founder Ver ...
doing business as Republic Bank in 2016. He became chief executive officer in 2021, and was fired in May 2022.
Book
Hill is the author of ''Fans Not Customers: How to Create Growth Companies in a No Growth World'', which was published by Profile Books in October 2012. It argues that it is better to have fans rather than customers and urges businesses to compete on service rather than price. The ''Financial Times'' reviewed Hill's writing style as "refreshingly to the point" and said that "for those looking for an alternate way of approaching service, the book will prove rich pickings".
Other investments
Hill was a partner with Steve Lewis in US Restaurants Inc, which operated 34 Burger King restaurants in metropolitan Philadelphia.
Hill's first business was Site Development Inc, a real estate development firm which has developed over 1000 shopping centres and retail developments in America.
In 1994, Hill, along with partners John Silvestri and Steve Lewis, founded and developed Galloway National Golf Club near Atlantic City, New Jersey. The course was designed by
Tom Fazio
Thomas Fazio (born February 10, 1945) is an American golf course architect.
Fazio graduated in 1962 from Lansdale Catholic High School and was inducted into its hall of fame in 2007. He began his career in golf course design with his family's f ...
and is ranked by GolfDigest.com as being among the top 100 courses in America.
Business philosophy
''Fortune Magazine'' describes Hill as a "flamboyant, tradition-stomping American billionaire" and "the
P.T. Barnum
Phineas Taylor Barnum (July 5, 1810 – April 7, 1891) was an American showman, businessman, and politician remembered for promoting celebrated hoaxes and founding with James Anthony Bailey the Ringling Bros. and Barnum & Bailey Circus. He w ...
of banking".
Hill has often advocated a business development strategy based on organic growth rather than acquisition, and by generating
customer loyalty
In marketing and consumer behaviour, brand loyalty describes a consumer's persistent positive feelings towards a familiar brand and their dedication to purchasing the brand's products and/or services repeatedly regardless of deficiencies, a co ...
through service rather than price. Speaking to a 2010
House of Commons
The House of Commons is the name for the elected lower house of the Bicameralism, bicameral parliaments of the United Kingdom and Canada. In both of these countries, the Commons holds much more legislative power than the nominally upper house of ...
Treasury Select Committee
The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons in the Parliament of the United Kingdom. The committee is responsible for examining and scrutinizing the ...
on
competition
Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...
and choice in the banking sector, Hill said:
"My opinion is that great retailers never grow by acquisition…If you see yourself as a retailer delivering an unusual service, acquisitions are the easiest way to kill your model… rganic growthis slower, but you get what you want at the end. You get a group of people running your model, not somebody else’s model…."
Hill is a critic of the
shadow banking system
The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that legally provide services similar to traditional commercial banks but outside normal banking regulations. S&P Global estimates that, at end-2 ...
, believing it to largely responsible for the
2008 financial crisis
The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
.
"We have two American banking systems. We have the normal banking system, with 8,000 banks serving consumers and businesses throughout America. Then we developed a shadow banking system…the money market funds, the investment banks, the credit default swaps. The current crisis is really a crisis of this shadow banking system….I think when anksare making a loan to, say, a restaurant, the overwhelming majority of banks aren’t playing games. As long as the guy’s paying, it’s a loan that pays back over time. Then we moved into all this exotic stuff — credit default swaps, CDOs. Believe me, no one at
Goldman Sachs
The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...
understands what they have on their books, because these kids are sitting at their computers dreaming this stuff up…."
Hill is often quoted as viewing his banks to be in the retail business rather than the banking business.
"You don't have to think about what time a
Home Depot
The Home Depot, Inc., often referred to as Home Depot, is an American multinational corporation, multinational home improvement retail corporation that sells tools, construction products, appliances, and services, including fuel and transportat ...
, a
McDonald's
McDonald's Corporation, doing business as McDonald's, is an American Multinational corporation, multinational fast food chain store, chain. As of 2024, it is the second largest by number of locations in the world, behind only the Chinese ch ...
or a
Starbucks
Starbucks Corporation is an American multinational List of coffeehouse chains, chain of coffeehouses and Starbucks Reserve, roastery reserves headquartered in Seattle, Washington. It was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gor ...
is open," Hill says. "They're open. You just go. My theory was, if you advertise that our bank isopen on Sunday, the consumer will automatically believe you're open all the time. That message is more important than the savings."
In its 2007 20-20-20 Club, ''Forbes'' magazine listed Hill as one of seven CEOs (along with
Warren Buffett
Warren Edward Buffett ( ; born August 30, 1930) is an American investor and philanthropist who currently serves as the chairman and CEO of the conglomerate holding company Berkshire Hathaway. As a result of his investment success, Buffett is ...
and
Larry Ellison
Lawrence Joseph Ellison (born August 17, 1944) is an American businessman and entrepreneur who co-founded software company Oracle Corporation. He was Oracle's chief executive officer from 1977 to 2014 and is now its chief technology officer a ...
) of publicly-traded companies with tenures of over 20 years to deliver an annual shareholder return in excess of 20%. Commerce produced a 23% annual compounded shareholder return over that time.
Personal life
Hill is the son of a Virginia real estate brokerage owner and the eldest of six children. He graduated from
Wharton School
The Wharton School ( ) is the business school of the University of Pennsylvania, a private Ivy League research university in Philadelphia. Established in 1881 through a donation from Joseph Wharton, a co-founder of Bethlehem Steel, the Wharton ...
of the
University of Pennsylvania
The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
in Philadelphia in 1967, earning a BS in economics with a concentration in finance.
Hill's 46,000 ft2 (4,270 m2) home, Villa Collina, is located in
Moorestown Township, New Jersey
Moorestown is a township in Burlington County in the U.S. state of New Jersey. It is an eastern suburb of Philadelphia and geographically part of the South Jersey region of the state. As of the 2020 United States census, the township's popula ...
. The home has an
orangery
An orangery or orangerie is a room or dedicated building, historically where orange and other fruit trees are protected during the winter, as a large form of greenhouse or conservatory. In the modern day an orangery could refer to either ...
. Hill has been married for 40 years to Shirley Hill, who is the founder of InterArch, the architectural and branding firm responsible for the branding for Commerce Bank and Metro Bank. The couple have four children, and Sir Duffield, their Yorkshire terrier.
The Hill Family Foundation supports various charitable organisations in both the US and Britain. It is one of the largest supporters of veterinary causes, including:
* A $10 million gift for the Vernon and Shirley Hill Pavilion at the School of Veterinary Medicine at the University of Pennsylvania, Vernon's alma mater.
* The Penn World Veterinary Award
* The UK Kennel Club Achievement Award