The council – which is pat of the Co-operative Councils Innovation Network – has become a founder member alongside more than 60 individuals, organisations and other local authorities. The investment from its Co-operative and Mutuals Development Fund will buy shares that can be traded with other members once the bank becomes profitable.
Subject to authorisation by the Bank of England and Financial Conduct Authority, the bank aims to launch in 2020. It will be the first ever member-owned high street bank dedicated to the residents and small businesses of Cornwall, Devon, Somerset and Dorset. And it will provide a full range of services to rival high street banks, including local branches, digital channels and current accounts.
Cllr Chris Penberthy, cabinet member for housing and co-operative development at Plymouth City Council, said: “Plymouth is leading the way in growing the co-operative and social enterprise economy. We are committed to supporting small businesses and want to see a fairer financial system.
“That is why we are honouring our commitment to support the establishment of South West Mutual, a new co-operative bank for the region, by becoming the largest investor.”
Tony Greenham, executive director of South West Mutual, said: “More of the important decisions that affect our economy should be made not in the City of London, but closer to home.
“We believe that a mutual bank dedicated to the sustainable prosperity of the South West will make a vital contribution to levelling the economic playing field for the region’s people and businesses.
“Having the support of Plymouth City Council is a huge boost to this project and we are looking forward to working with stakeholders across the region’s largest city to make the new bank a reality.”