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Avon Mutual's new year progress update

Happy new year to all.


It feels like a good time to update our growing community on our great progress to launching our region's mutual bank. Since our last update we have been very busy and made some significant leaps forward.


Progress on bank licensing

Firstly, the FCA and PRA have now reviewed our regulatory business plan (RBP) and in the autumn we had two ‘Feedback’ meetings with them as part of the second of three major stages on our journey to being granted a banking licence. These Feedback meetings marked the culmination of a tremendous amount of preparatory work from the whole team, and the start of the journey to launch.

We are now progressing well with the updated version of our RBP which we hope to send the regulators soon for further feedback and to progress in the summer to the third and key stage of being invited to the ‘Challenge’ meeting which will kick off the final licensing process prior to launching the bank next year.

Funding and due diligence progress

Our second exciting milestone relates to start-up funding and capitalisation due diligence and we are pleased to have completed the first phase of RSM Corporate Finance’s due diligence for a consortium of the region’s Local Authorities led by Bristol City Council and including S Glos CC and Stroud DC. This due diligence is in connection with potential major investment in our final £20m investment raising in 2021.

In addition to this investment due diligence work with BCC, S Glos and Stroud, we also have ongoing support from Wiltshire CC, who have already invested in the bank, and where we have great support from local MPs and the LEP, and good ongoing conversations with other LAs including N Somerset and BANES whose post-covid Renewal Vision we were delighted to be part of developing.

On the basis of this first stage due diligence BCC’s cabinet recently signed off a further £200,000 investment in AM, half of which is pending further due diligence we are currently working towards. BCC has also signed off an additional £50,000 for second phase due diligence work on our social, economic and environmental impact framework .

This latest BCC investment forms part of our second investment round announced in September which was a raise of £2.4m, with a first stage target of £500,000. We are pleased that we have now successfully raised more than our target having now reached a total of £725,000. Of this amount £400,000 is from sales of shares to new as well as previous investors investing again and £325,000 is in the form of two major grants.

The first of these two new grants is a £200,000 award from 30 Percy, the sustainability and inclusion focused Gloucestershire foundation of the family who founded Ecover. We were delighted to be awarded this grant because of the foundation's match of values and outlook with our mission.

We also pleased to be able to announce that one of our previous grant funders, Open Societies Foundation, who in 2020 awarded us an investment readiness grant of £200,000 from their Economic Justice Program, has just awarded us a second investment readiness grant of £125,000 and continues to show interest in major investment in shares to help capitalise the bank.

Impact assessment, market research and outreach

As well as continuing to progress our bank license application we are hard at work developing our Social, Economic, and Environmental impact framework in consultation with community and business organisations across the region in preparation for the second phase of the RSM due diligence for Bristol City Council.

We have also completed a second round of detailed market research with Opinium and with partners across the region to continue our effort to ensure we better understand the banking needs of the region and to refine our proposition. The results have been very positive, and support our belief that there is good demand for an ethical, regional mutual bank like ours. For example, 76% of residents of the region said they consider it important for a bank to offer physical branches, and 57% said they would prefer to do more shopping locally or with local providers following the pandemic. We’ll be releasing more insights from our research over the coming weeks and months, so stay tuned for those.

In the meantime, we’ve also been reaching out to local business networks to gather the views of the SMEs we aim to serve, as well as appearing in an interview with the South Cheltenham Business Network, and will be featuring on an upcoming panel discussion on “Ethics in Business” with the Swindon and Wiltshire LEP on February 10th. The next step in our research efforts will be to conduct in depth focus groups with both small businesses and individuals, so get in touch if this is something you’re interested in or could help out with.

Recruitment news

In other important news we continue to build our team and are delighted to announce a new member Trish Norman who joins as our Head of Operations. Trish brings a wealth of experience and before joining us, Trish's career has included roles as Group Head of Business Delivery, Solutions & Transformation at One Savings Bank and Head of Mortgage Operations, Collections and Recoveries at Principality Building Society spanning many years. Trish has wide experience of leading teams to build and improve areas directly servicing customer needs which are of course the key focus for a community bank like ours.

We are also currently recruiting for a CEO to lead the bank going forwards and hope to announce having filled this key role very soon. In addition to these two important hires we are also recruiting two other senior level roles.


Looking forwards

Last year was a tough year for citizens and communities across the region and as you can see we are working hard so that we can soon play our part in helping the region recover and ‘build back better’ from the pandemic.


Building a banking sector fit for people and planet and resilient to shocks like covid is core to our vision and our model. As the RSAs report The Road to Resilience: How Community Financial Services Can Help Level Up Britain illustrated recently, the current highly concentrated, non regional and non-mission oriented UK banking sector has failed to help businesses recover from COVID.


Avon Mutual-like regional and values-led banks in other countries like the US and Germany have been able to provide far better bank support to local businesses for COVID recovery. We therefore look forward to launching soon and being able to play a similar role in our region’s economy and communities.

In summary

As you can see, it's so far been a busy winter for the team and it's great to feel our momentum building.

We will keep you regularly updated as we continue to make progress.

Thank you for your ongoing support and please do spread the word by passing on this update, and drop us a line if you’d like to engage with us.


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