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An update on Avon Mutual's new chair and progress towards licensing


Dear followers, with things moving fast in our progress towards licensing we thought we would provide a short update.


As you can see below we are making great progress on growing our team, raising our final launch capital, the bank licensing process and ongoing start-up investment raising.


Introducing our new Chairman

We are very pleased to introduce our new Chair Garry Marsh who has over 50 years experience in retail banking, focused mainly on consumers and small business, much of his time with Barclays, both in the UK and in Africa and the Middle East. He has held several board Directorships and consulted for the World Bank and Commonwealth Development Corporation amongst others.


Garry joins at an exciting time for us and is looking forward to working with the rest of our growing team, including Peter Horton, our CEO, a very experienced banker who has been CEO of five previous banks and our other newest board member Whit Hanks, whose fascinating story you can read here, and who himself founded a highly successful regional community bank in the US 30 years ago.


Final capital raising update

Aside from ongoing start-up capital, which we discuss more below, we also need to raise circa £22m regulatory capital in order to launch. This capital will be in the form of investment which we draw down only once we have passed the very high due diligence bar of being offered a banking licence by the Bank Of England's FCA and PRA.


In terms of progress on raising this final capital, as we mentioned earlier this year, Bristol City Council (BCC) signed off a third round of investment after a very detailed year-long independent due diligence process. Following on from this we have had further meetings with WECA Mayor Dan Norris, BCC Mayor Marvin Rees and Bathnes Leader Kevin Guy as well as their CEOs and other key officers, all of whom have expressed support for our plans and continue to explore major investment in our final circa £22m capital.


We continue to discuss this major final capital investment with other councils across the region as well as with Universities and other ‘anchor institutions’. With a number of these institutions now considering six to seven figure investments we estimate that we have well over half this final £22m capital ‘in conversation’ with such potential investors.


This is important to us as, as we progress through the final key stage of the bank licensing process with the PRA and FCA, we will need to show investment commitments in principle, subject to licensing, for all our final required £22m launch capital.

Licensing progress

In terms of progress towards gaining our bank licence, we have recently updated our financial model and business plan in line with the significant changes in the economy we are seeing and are currently putting the finishing touches to what we hope will be our near final Regulatory Business Plan (RBP).


Having just had a successful review meeting with the regulators we plan to input this RBP to the regulators for their final feedback within the next week, We hope to then soon be green-lighted to move to the critical ‘Challenge’ stage of the licensing process - a stage at which more than 90% of banks go on to gain a bank licence.


Once through that ‘Challenge’ stage we can expect between 6 and 9 months of final licensing process work with the regulators before we gain an initial ‘Authorisation With Restrictions’ (AWR) allowing us to build and test systems and start the launch of the bank to the public.


A reminder of the headlines on our planned impact

With the climate and nature emergency and the cost of living crisis now being centre stage, along with the ‘levelling up’ and 'build back better' agendas, we are very excited about the role the bank will play in our local economy.


The bank will be an important actor in our regional economy and we plan to have balance sheet lending of circa £0.6bn and cumulatively be lending over £1.2bn by year 10. This in turn will bring a ‘local multiplier economic’ impact of circa £740m-£1.7bn in the first 10 years of operation, excluding any economic impacts from financial inclusion and mortgage lending and create or protect almost 80,000 jobs through our lending and operations.


We’ll be serving more than 15,400 SMEs, including sole traders, urban independents, and 3,300 charities and other mission driven businesses and 66,800 individual customers. Of those individual customers more than 10,300 will be financially vulnerable and we hope to bring 2,200 unbanked people into the financial system with their own current account, producing at least £700,000 saving per year on the Poverty Premium and with approaching £1m saved in interest for vulnerable customers not using high cost credit.


Unlike the mainstream banks, so reliant on the ‘casino’ speculative economy, £533m of our overall assets will be based in the ‘real economy’ rather than the financialized or speculative economy. In addition to this, by Year 10, £390m of our assets will be with projects that create a positive social, economic, or environmental impact.


With our planned mission to focus on lending to things like ‘green mortgages’, eco-build and community-led housing and ‘agroecology’ farming we also aim to have significant alignment with and reporting across many other issues including UN Sustainable Development Goals and with things like carbon emissions, pay ratios, diversity metrics and other areas of social and ethical relevance.


Because of these impressive planned impacts we have a growing list of supporters from businesses and business networks, community groups, faith groups and leading figures from across the region and nationally.


Start-up investment update

Having already raised over £1.7m in our first round of investment, we have now also raised over half of our current second investment round £800k target which we require to reach the critical ‘Challenge’ stage of licensing. We therefore now require only circa £400k to reach this key Challenge stage.


If you would like to know more about how you can support our progress please do get in touch and please do also socialise this blog in your networks.









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