Council applies for licence to open new cooperative bank in Preston

Preston City Council has taken the next step in establishing a mutual bank in the city.

The council has submitted a formal banking licence with the Bank of England which is a crucial step towards opening the North West Mutual bank's head office in Preston.

North West Mutual is a cooperative society behind pioneering plans for a mutual bank serving retail and business customers in the north west of England. The bank’s ambition is to establish the UK’s first regional co-operative bank.

It was announced earlier this year that North West Mutual Bank had selected Preston as the location for its head office and the first of 60 planned branches across the region. The first phase is expected to create about 40 new jobs in Preston, with up to 200 roles anticipated across the north west as the bank expands and additional branches open. Recruitment for the initial positions is due to begin later this year.

Dave Burke, CEO of North West Mutual Bank, said: “This is a hugely significant milestone for North West Mutual, and one that fills us with enormous pride and excitement. Submitting our formal banking licence application brings us another important step closer to providing the banking services we believe the people, communities and businesses of the North West both deserve and want.

“Reaching this stage is a considerable achievement. Before submitting our application, we have been through an extensive period of pre-application engagement with the Bank of England and the Financial Conduct Authority, during which our proposition, business model, governance arrangements and plans have been subject to detailed scrutiny and challenge.

“Although submission does not guarantee that authorisation will be granted, prospective banks are expected to demonstrate that their proposition is credible, viable and sustainable and that they are ready, willing and organised to enter the formal assessment process. Reaching this milestone is therefore testament to the tremendous amount of work undertaken by the North West Mutual team and to the constructive relationship we have developed with the regulators. We now look forward to continuing that engagement as they undertake their full assessment of our application.

“Our ambition is to establish the UK’s first regional co-operative bank, offering a genuine alternative to a corporate banking landscape that has been characterised by widespread branch closures and a substantial reduction in lending to small and medium-sized businesses. We want to create a bank that is rooted in the North West, understands its communities and is committed to supporting the region’s long-term economic prosperity.

“North West Mutual will be built on distinctly co-operative and ethical foundations. Our democratic structure will give every member one vote, regardless of how much money they hold with the Bank. We intend to pay the Real Living Wage and maintain a sensible and transparent ratio between our highest and lowest salaries. These principles reflect the responsible, inclusive and accountable institution we want to build.

“I would like to thank Preston City Council for the important part it has played in helping us reach this stage, and for its continued support and confidence in our vision. Preston is central to our plans: it will be the home of our head office and, subject to regulatory approval, our first branch."

Councillor Valerie Wise, deputy leader and cabinet member for community wealth building at Preston City Council, said: “North West Mutual Bank is making great progress and we will continue to support the bank along its journey to opening the first branch and head office in Preston. Its ethical approach to banking aligns with our corporate priorities and ambitions and our long-standing commitment to Community Wealth Building that is helping to build fair and resilient communities and to support a democratic economy where everyone can thrive.”