UK's Metro Bank ramps up lending to challenge bigger rivals

* Total (NYSE: TOT - news) loans grow to 1.16 bln stg, up 216 pct

* Bank makes second quarter loss of 9.9 mln stg

LONDON, July 23 (Reuters) - Britain's Metro Bank said on Wednesday its lending had more than trebled at the end of the second quarter compared with a year earlier, and more than half of its lending was to businesses.

Founded by U.S. entrepreneur Vernon Hill, the bank has been championed as an alternative to Britain's 'big four' lenders - Lloyds Banking Group, Royal Bank of Scotland (LSE: RBS.L - news) , Barclays (LSE: BARC.L - news) and HSBC.

British lawmakers and regulators want to stimulate competition within the industry and the country's competition watchdog last week set out plans for an investigation into banking services for small business and individuals.

Metro Bank, which launched in 2010 as Britain's first new high street lender for more than a century, said its lending amounted to 1.16 billion pounds ($2 billion) at the end of June, up 216 percent year on year. Customer deposits increased to 1.96 billion pounds, up 125 percent.

"Strong growth in lending and deposits continues to demonstrate that the British people need and want a choice about where they do their banking, and we're here to provide that," said Chief Executive Craig Donaldson.

Metro Bank has 27 branches in London and the southeast of England, with 5 more due to open this year. However, it has yet to make a profit.

The bank made a loss of 9.9 million pounds in the second quarter, which it said was due to investment in new staff, branches and technology.

($1 = 0.5857 British Pounds) (Reporting by Matt Scuffham; editing by Jason Neely)