Ecology Building Society says it has completed its latest round of capital raising to support its growth strategy, including doubling mortgage lending and opening branches to offer face-to-face high street service for the first time.
This month, Ecology announced plans to open its first ever branch, in Porth, South Wales, while the lender has previously stated ambitious growth targets for its impact-led mortgage lending.
Investment in the mutual’s modernisation and expansion is bolstered by the funding secured through core capital deferred shares (CCDS).
The latest tranche of Ecology’s second CCDS issue secured £2.9m, taking to £10m the total raised from investors including pension funds, charitable foundations, wealth managers, and high net worth investors.
“Being able to raise additional, high-quality capital through CCDS is significant for a mutual our size and means we can realise our growth ambitions,” said CEO Gareth Griffiths.
“Our new branch in Porth will be the first in a new network, for Ecology to support under-served communities left in banking deserts as the big high street providers have abandoned them. We’re determined to show the big banks what an efficient and effective branch network can look like, helping local people, businesses and communities to thrive.”
Related: Ecology Building Society raises £7m to support growth plans
He added “And after a strong start to the year, we aim to double our mortgage lending to deliver even greater social and environmental impact. Our mortgages help affordable and community-led housing schemes to become a reality, as well as enabling homeowners, buyers and builders to make their properties more energy-efficient and cheaper and more comfortable to live in.
“We continue to innovate with our products and our expertise and insight into affordable housing and other alternative tenures indicates unmet demand for lending in these markets, to help more people onto the housing ladder, such as through discounted market sales.
“Following the traditional building society model, deposits by our savings members fund our mortgage lending but this is boosted by capital raised by CCDS – for every £1m raised through CCDS, we can lend £22m.
“This latest funding completes our capital raising for now. I’m grateful for the support from investors who have been attracted by our ethical principles and vision of what Ecology can achieve.”
Griffiths thanked Ecology’s professional advisors – the issue was placed by Allia C&C Ltd, which has also managed the listing of Ecology’s CCDS on the International Stock Exchange (TISE), the first UK building society to do so.
Allia C&C’s Ben Hall said: “Ecology is the most recent building society to be founded in the UK and benefits from a strong track record on performance and a focus on delivering exceptional social and environmental impact.
“It is good to see the way this has been recognised by investors in the strong support they have provided on the issue. Building societies are a highly regulated part of our financial markets serving a wide section of our community and we were delighted to raise this equity issue for Ecology at lower rates than have recently been available to small financial institutions.”
Ecology first issued CCDS in 2020 to raise capital to facilitate its growth ambitions and had raised £7.1m of capital by the end of 2025. This funding has supported strong growth in the society’s balance sheet and enabled significant investment to modernise and futureproof the mutual.
Ecology is currently nearing completion of the upgrade of its IT systems, moving to a new core banking platform. This will enable the launch of a new Ecology App, new products including fixed rate mortgages and savings accounts, and service improvements for saving and borrowing Members, as well as mortgage brokers.
The systems transformation, part of wider modernisation of Ecology’s business, will help the society to grow its membership and mortgage lending, reach new customer groups, and increase its positive social and environmental impact.
Allia C&C’s legal counsel was Addleshaw Goddard and Mills & Reeve advised Ecology.
