A new community bank intends to open 16 branches across Lancashire - including on the Fylde coast.

The North West Mutual says it hopes its first outlets will be in operation before the end of the next year, with the remainder following by spring 2027. The provisional list of locations includes Blackpool, Lytham St Annes and Fleetwood.

The bank is promising to offer what it describes as a “bricks, clicks and flicks” model – combining traditional high-street branches with online banking.

The North West Mutual concept revolves around creating an “ethical” customer-owned bank that provides accounts, loans and other services only to individuals and businesses based in the region it will serve – the North West of England. The aim is to strengthen the local economy by “recycling” an estimated £900m of money within it – rather than allowing the cash to leak out to other parts of the country.

Billing itself as "the sharing bank", the North West Mutual plans to open branches right across Lancashire | North West Mutual

placeholder image — Billing itself as "the sharing bank", the North West Mutual plans to open branches right across Lancashire | North West Mutual

The organisation is planning to apply for a banking licence later this year, more than six years after the blueprint for a North West regional bank was first developed.

Chief executive Dave Burke said of the branch plans: “Our aim is to provide access to as many people and businesses in the North West as possible, with 95 percent of residents and small and medium-sized businesses within a 30-minute drive to a branch.

“Whilst we have specific locations in mind to achieve this, we also want to listen to the people and businesses of the region and welcome thoughts and suggestions on branch locations.”

When plans for a North West community bank first emerged in 2019, it was estimated a total of £20m would be needed to bring it into being. At that time, Preston City Council, Liverpool City Council and Wirral Council had all expressed an interest in supporting the venture.

Preston has since ringfenced £1m in its budget for that purpose - and last month drew down the first £250K of it to purchase shares in the North West Mutual. However, Liverpool and Wirral councils have both walked away from the project.

The North West Mutual said last month it was “in discussions with a number of local authorities and other potential investors” - and revealed around £1m had been invested to date preparing the banking licence application, along with developing the systems and financial model for the new bank and analysing its potential market.

The Labour leadership of Preston City Council says it wants to provide residents with an alternative to large-scale banks, but opposition politicians on the authority have condemned the commitment of taxpayers’ money to the scheme with, they say, no guarantee of getting it back.

Mutually beneficial?

Responding to claims by the Liberal Democrats on Preston City Council that customers of the new North West Mutual would be charged £60 a year for their accounts, Dave Burke said no final decisions had yet been taken about “product pricing”, which would be subject to detailed customer research. However, he acknowledged that “a small monthly fee for a personal current account is being considered – and £5 per month [or] £60 a year is the current working assumption”.

But Mr. Burke said the benefits of banking with the North West Mutual also had to be factored in – and stressed many customers would still end up better off.

“We respect that people have a choice about which bank they have their current account with and recognise that not all people would want to pay.

“Our research shows that almost 40 percent of personal current account (PCA) customers in the North West have a monthly or annual fee for their existing PCA [Financial Lives Survey 2020] and just over 40 percent would pay for one, ranging from £5 to £20. So there’s a precedent for paying and an appetite to pay within the customer base of the region.

“People want there to be a positive reason for paying a fee. We believe we have several. We will open 60-plus branches at a time when branches continue to be closed. Importantly, these branches will also have more convenient opening hours and won’t be restricted to the times when a significant majority of people are at work and struggle to access them.

“In addition, we will be paying interest on all positive current account balances, at a higher rate than the majority of high street banks. Our mutual status also makes a positive difference here, in that all customers will be members and benefit from sharing in the profit of the bank. As an example, a PCA customer with an average balance of £1,000 could expect an annual surplus…of £35 [based on earning £20 in annual interest and a £75 annual profit share, minus the £60 account charge].

“In short, there is evidence of enough people already paying for their PCA and being willing to do so. Plus, we believe the branch network, its extended availability and the returns from interest and profit sharing make this a very attractive and realistic proposition.”