Portsmouth City Council leader says authority could pull out of Hampshire Community Bank - after investing £15m

DESPITE investing £15m into the project, Portsmouth City Council could pull out of a fledgling community bank due to ongoing delays in setting it up.
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Council leader Gerald Vernon-Jackson made the suggestion after being told the Hampshire Community Bank will not be fully operational for at least another year, six years behind its original schedule and eight years since the council became involved.

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The new Hampshire bank underpinned by £15m of Portsmouth taxpayers’ cash

‘This organisation worries me,’ he said. ‘It has taken eight years to achieve precisely nothing. I would be looking in detail about whether we should continue to be part of this organisation or not.’

Portsmouth City Council may pull out of the Hampshire Community BankPortsmouth City Council may pull out of the Hampshire Community Bank
Portsmouth City Council may pull out of the Hampshire Community Bank
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The city council first gave its backing to the bank in 2014, investing £5m to become a founding member and majority shareholder in its holding company, HCB Holding Ltd. This was followed by a £10m loan in September 2020.

It had been hoped the bank would be up and running by early 2016 but it has still not submitted an application for a bank licence from the Bank of England.

Without this, the bank is unable to use the word bank in its company name, and is officially known as Hampshire Community Bnk Ltd.

The council has been able to issue loans to a number of companies as no licence is needed to lend money.

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City council deputy director of finance, Julian Pike, said the application was expected to be submitted 'sometime during this month'.

‘The company has progressed quite a long way along the path of achieving its banking licence and is very close to making its final application for that,’ he said. ‘I have confidence on this.’

He said approval was expected early next year.

Conservative group leader Simon Bosher has urged a full progress report to be brought before councillors before any decision on whether to pull out of the project is made.

‘If the leader of the council has these sorts of concerns about the bank then he needs to put them in a report for councillors to scrutinise, rather than making flippant comments at a cabinet meeting,’ Cllr Bosher said. ‘In principle, the idea of a community bank is a good one that should benefit the city.’

Hampshire Community Bank did not respond to requests for comment.