The proposed opening date of a mutual bank in which Preston City Council has invested £250k has been pushed back.
The location authority has put in around one quarter of the roughly £1m which has so far been invested into the development of NW Mutual, a mutual bank planning a network of 60-plus branches to be ‘owned by, based in and for the people and small and medium-sized businesses of the north west of England’.
According to NW Mutual, the financing agreed by the local authority will be used by NW Mutual to pay for existing and future staff and key systems involved in the development of the bank and as a significant contribution to ultimately acquiring a banking licence from the Bank of England.
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NW Mutual chair Dave Burke has registered it with regulator the Financial Conduct Authority (FCA) and is preparing a banking licence application to submit to the Bank of England towards the end of 2025.
If the licence is granted the first branch is planned to open in the first quarter of 2027, with a full roll-out proposed to follow later in that year. Earlier this year, it had previously said it hoped to open its first branch in 2026.
The head office of the bank will be in Preston, at a yet to be confirmed location and is also scheduled to open in early 2027.
Dave Burke, chief executive of NW Mutual, said the investment by Preston City Council represented a ‘good use of taxpayers’ money’.
He said: “This invaluable and welcome commitment of £250,000 will help to create a bank that is built by people of the north west, for the people and businesses of the region.
“We will bring branches back to the high street, make lending decisions based on knowledge of the region and its people and businesses, and distribute the profits from the bank to its members. We continue to seek additional investment from other local authorities and the private sector.”
NW Mutual plans to open a network of about 60 branches around the north west, including 16 in Lancashire, 20-plus for Greater Manchester, 12 around Liverpool and Merseyside, another 10 in Cheshire and six for Cumbria.
It says a ‘bricks, clicks and flicks’ business model will deliver hi-tech and staffed branches, complemented by mobile and online banking, providing retail and small and medium-sized enterprise (SME) customers with a full range of financial products and services.
Councillor Matthew Brown, leader of Preston City Council, and Councillor Valerie Wise, cabinet member for community wealth building, joined Mr Burke to confirm the investment, which was first announced in February.
Cllr Wise said: “Preston City Council is proud to invest in NW Mutual, a mutual bank to be based in the city but with branches across Lancashire and the wider north west. Being owned by its customers and not shareholders, NW Mutual will focus on community well-being, returning profits to members and reinvested in local communities, generating economic growth.”
Despite the high hopes within the ruling Labour group, the investment has faced criticism from opposition councillors, with Liberal Democrat group leader John Potter describing it as a “vanity project”.
In an wide-ranging interview with Blog Preston, Cllr Brown insisted there could be significant local benefits from schemes such as this. He said: “This would be an alternative to the big banks which have shut and moved out of communities. And they are planning to be headquartered in Preston.
“We’re keen to have a more democratic economy, which might sound quite abstract, but the more businesses we can get into the ownership of the workforce or the community we feel will tackle some of the social problems”
Work on the new bank dates back to 2019 – or earlier – with the proposed mutual bank due to also be backed by Liverpool City Council and Wirral Council but both have since pulled out of the venture.
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