Unity Trust Bank has gained independence from the Co-operative Bank after buying back the majority of the Co-operative Bank’s shares in Unity.
The Co-operative Bank owned 26.7% of Unity through its subsidiary, Co-operative Commercial Limited. In January 2014 the Co-operative Bank announced its intention to sell its shares in Unity.
The two organisations signed an agreement on 16 December 2015 whereby Co-operative Commercial Limited has sold shares to Unity, to reduce its holding to 6.7%. Unity has also developed new articles of association that combine shares into one class, removing the different rights of the old clauses. The Co-operative Bank no longer has a controlling interest in Unity nor does it have the right to appoint directors.
Set up in 1984 by trade unions, Unity Trust Bank sees itself as a challenger bank for small- and medium-sized enterprises and organisation that have a positive social, economic and community impact. The new articles of association focus on Unity’s social purpose and require 75% of shareholder to agree to make future changes.
In 2014 Unity reported a profit after tax of £0.97 million, while operating expenses increased to boost growth, including additional costs of £0.4m to enable Unity to function independently of the Co-operative Bank. According to Unity, the expansion was financed through capital raised from existing and new shareholders totalling £8m.
“Today’s announcements represent the most significant changes to Unity since the bank was founded thirty years ago,” said Alan Hughes, Unity’s Chair.
“We are now an independent bank, with a new board, new leadership and the capacity to grow. Our commitment to delivering a double bottom-line of both social and economic benefit is now enshrined in our constitution.
“Demand for a bank with a social conscience is stronger then ever and I am delighted we have attracted additional capital to be able to meet it.”