Challenger banks have welcomed the developments which would allow them to operate with lower capital compared to their larger banking rivals.

Chief executive of Secure Trust, Paul Lynam says, “Small banks need to get bigger and take business away from the bigger banks”.

“That is the only way in which the taxpayer will be off the hook for bailing out ‘too big to fail’ banks in the future. So it was good to hear George Osborne saying he would push Europe for a more proportionate treatment for the capital required for smaller banks.”

Lynam is also optimistic that the delay to the Competition and Markets Authority’s report into retail banking indicates that the regulator is preparing much stronger recommendations on helping challenger banks.

Chief executive of buy-to-let lender OneSavings Bank, Andy Golding, is even more sceptical that help is on the way for challengers.

He said: “The CMA has been talking about boosting competition to the big banks for five years. There are some encouraging noises from Andrew Bailey and the Prudential Regulation Authority but as we see with Williams & Glyn and TSB, separating the big banks is very difficult.”

Secure Trust’s profits rose 40% to £36.5 million last year, with lending up 73% to £1.1 billion. The ordinary dividend goes up from 52p to 55p, and shareholders will get a 165p special dividend when the sale of Everyday Loans completes in April.

OneSavings’ profits rose 52% to £106 million on lending up 31% to £5.1 billion. It is paying a dividend of 8.7p a share.