'Trustworthy bank' for Preston and beyond moves a step closer as boss appointed and council restates support

The authority first signalled its intention to back the North West Mutual Bank in 2019 - provisionally earmarking £1m for the purpose - but the venture has yet to get up and running.

However, that could all be about to change, with the community bank appointing a chief executive and revealing plans to apply later this year for a licence to operate. If that permission is granted, it says the first of its 60 planned branches could be hitting high streets in the region by the end of 2026, ahead of a full rollout early the following year.

Using what it describes as a “bricks, clicks and flicks” model, the North West Mutual will also offer mobile and online banking to individuals and small and medium-sized enterprises (SMEs) - working to serve and support the regional economy on which it will rely for its own success.

“Faceless banks holding the keys to the money isn't working for the North West - it’s time we had our own key,” a promotional video on the bank's website declares.

The North West Mutual Limited’s new chief executive - Bolton-born Dave Burke - says the bank will help retain money in the region for the benefit of its people and businesses.

>» Sign up for our free newsletters now

When the idea was initially mooted for a bank whose customers would be based solely in the North West, Preston was one of a trio of councils to swing in behind the concept - and pledge to match warm words with what was then the £20m in hard cash needed to make the concept a reality.

The other two partners in the project - Liverpool City Council and Wirral Council - have since withdrawn from it, but the North West Mutual has told the Local Democracy Reporting Service it is “in discussions with a number of local authorities and other potential investors”.

Opposition politicians on Preston City Council have previously criticised the authority's financial commitment to the bank, but ruling Labour group leader Matthew Brown says he is still right behind the proposal.

“Preston is fully supportive of the plans for a North West Mutual Bank, a co-operative society that is both ethical and a democratically-owned way of doing business.

“As part of our commitment to community wealth building in the city, we encourage people to spend and save locally, for the benefit of our communities, and value everyone’s contribution to a fairer society and a sustainable local economy.

“We would hope to be able to invest directly in the bank, should it go ahead, subject to council approval,” Cllr Brown added.

The bank was due to be discussed at a city council meeting before Christmas, but the item was dropped from the agenda and a report associated with it was never published.

The authority has not yet handed over any of the £1m it has considered investing in the North West Mutual. The sum was once again listed as being attached to a "scheme awaiting approval” in last year’s budget. The city council will set its next budget in around six weeks.

North West Mutual Ltd. has been registered with the Financial Conduct Authority, the UK's regulator of financial services firms and markets. The Bank of England will decide whether to issue the institution with a licence once an application is submitted.

Around £1m of investment - separate to that ringfenced by Preston City Council, has been made in preparing that application, along with developing the systems and financial model for the new bank and analysing its potential market.

‘LEAVE BANKING TO THE BANKERS’

Both the Liberal Democrat and Conservative opposition groups on Preston City Council have long been critical of the authority’s plans to invest in the community bank project.

Tory group leader Stephen Thompson said of council leader Matthew Brown’s restated commitment to the initiative: "I think local authorities should not be getting into banking.

“Small independent banks have been successful and attracted customers who can't get an account with the bigger banks. But there is a financial commitment that should not have to be paid by the taxpayer.

“There are plenty of demands on taxpayer [cash] currently and with the likelihood that council tax will be raised again this year - in some places by as much as 14 percent -

I would ask, ‘Why are we adding to the burden?’"

BANK WILL BENEFIT THE REGION 'TO THE TUNE OF £900M'

Newly unveiled North West Mutual chief executive Dave Burke says the bank will help “recycle” money within the region - and stem the flow of it out of the North West and to other parts of the country.

“Our market research, supported by a large body of public research and information, shows that there’s a real need and demand for a bank that is trustworthy, democratic, ethical, deeply rooted in the North West - and that enough people and businesses in the region would use to make it a great success,” Mr. Burke explained.

“The North West is more than capable and large enough to create and sustain a prosperous bank. When we achieve our goals, our mutual bank will recycle more than £900m of money from the North West back into the region.

“This is serious money and it’s already here - but it’s not. We want to stop it leaking out and heading south, north or east,” added Mr. Burke.

He said it was “an enormous privilege to be charged with sharing the prosperity and power that a bank creates with the people who create it”.

Mr. Burke has a background in launching, building and managing regulated businesses. He has held senior roles at high street banks and retailers, provided strategic consultancy services to major organisations seeking to enter financial services and co-founded financial services consultancy Callemott Ltd..

Meanwhile, David Milner, chair of NW Mutual Ltd., said he remains “committed to mutuality as the best model for financial services” - after being involved in the sector for more than 50 years.

The former chairman of the Dudley Building Society and Nottingham Imperial Building Society added that he believes the North West will "benefit greatly” from having its own mutual bank.

IS THE FEELING MUTUAL?

The self-proclaimed “sharing bank” says the North West is being “held back” by the current banking system.

“Owned by us, the North West’s own bank will share our hopes and dreams - and its profits. This new sharing bank will look to reinvigorate all corners of the North West through easily accessible branches and localised decision-making.

“The North West needs its own bank to unlock its potential,” the North West Mutual says in an online video.

Mutual monetary institutions are owned by their customers and have no external shareholders. Profits are usually reinvented into services, although the North West Mutual says that when it reaches "adequate and sustainable profitability”, it wants to "share those benefits back with the customers that helped create it”.

It will operate on a one-member-one-vote basis, giving control over its operation to customers.