Community bank launch is delayed

PLANS to establish a new community bank for Wales, a manifesto pledge of the Welsh Government, have been delayed.

The project is being taken forward by Monmouthshire Building Society, which is looking to use its existing regulatory approvals, but operating the bank separately from its building society activities.

However, it would require a fundraise potentially up to £20m just to get the necessary reserves to launch, before the associated startup costs including IT and branches. This could potentially be financed by the Welsh Government through the use of Treasury supported financial transactions capital.

The establishment of a community bank featured in Labour’s manifesto for the 2021 Senedd election. The goal is to have up to 30 branches across Wales – aimed at addressing the issue of high street banks reducing their high street presence.

The original concept of a community bank (Banc Cambria) was taken forward by Cambria Cydfuddiannol

Ltd which received grant funding of several hundred thousand pounds from the Welsh Government, and whose directors include Mark Hooper and Tegid Roberts.

In a written statement Economy Minister, Vaughan Gething, has confirmed that the proposed bank will not become operational this year as originally planned – blaming the decision on the challenging economic climate.

The minister confirmed the position after a meeting with the board and chief executive of Monmouthshire Building Society, Minister for Social Justice, Jane Hutt and representatives from Cambria Cydfuddiannol.

Mr Gething said: “At the meeting we were informed by Monmouthshire Building Society that ongoing work to deliver a community bank is inevitably being impacted by factors such as rising interest rates, a contraction of the mortgage market, falling house prices and a costof-living crisis, with the Bank of England predicting a recession.

The chief executive ( Will Carroll) has confirmed that the Monmouthshire Building Society remains fully committed to its programme of work to develop and deliver a community bank.

“However, in light of prevailing economic conditions, they are not planning an active roll-out in 2023. Key work to enable delivery will continue and Monmouthshire Building Society will update me again before the summer.

“I recognise that a community bank is a commercial venture on the part of Monmouthshire Building Society, who have received no public funding to do this.

“Building on work undertaken by Cambria Cydfuddiannol Ltd they have developed the vision and are committed to delivering a community bank that is successful, sustainable and has a presence on high streets across Wales for years to come. The Welsh Government remains committed to supporting delivery of a community bank.”