Members of Belgian co-op bank NewB approve partnership with vdk

The deal gives NewB customers access to additional vdk bank products and services from April

Members of Brussels-based NewB bank voted in favour of a partnership with vdk bank at an extraordinary general meeting on 14 January.

The move comes after NewB ran into trouble with the regulators over its failure to meet a €40m capital requirement.

Under the agreement, NewB will become a banking and investment agent for vdk. This means that NewB will no longer have a banking licence. The meeting also approved changes to NewB’s statues to enable the agreement. While the articles of association already authorised NewB to act also as an intermediary in insurance and investment services, they did not authorise it to act as an intermediary in banking services.

Following the loss of the banking license and in view of the collaboration with vdk bank, it was also necessary to
modify NewB’s ‘social purpose’ and add intermediary in banking services to the list of activities that may be carried out. As a co-operative society, rather than a bank, NewB will have to meet lower capital requirements.

NewB’s banking clients will be transferred to vdk, subject to the regulator’s approval. NewB will be compensated for this clientele via an indemnity proportional to the amounts held by in the current accounts, savings and investment fund accounts transferred.

At the same time, NewB will continue to act as an insurance agent for mutual Monceau. The agreement will also allow NewB to become the intermediary for VDK bank’s French-speaking customers in banking and investment services – for which it will receive a compensation from vdk proportional to the he volumes of products and services used by its customers.

According to vdk bank, NewB customers will have access to the new vdk bank products and services as of April this year. Meanwhile, NewB’s Dutch speaking customers will be served by one of VDK’s 60 or so branches, unless they specifically request to continue to be served by NewB, in which case the later will provide remote digital services for them.

Although NewB will not not have a seat on official governance bodies of vdk bank, in the event of reaching a certain level of business, NewB could be able to propose a member to the board of vdk bank. In such an event, the proposal will be examined by both parties, within the existing regulatory framework for banks.

The amendment to the articles of association was approved with 95% of votes among the individual co-operators and civil society organisations. Meanwhile, the institutional actors voted unanimously in favour of the amendments. As such, the required 80% threshold was met.

Bernard Bayot, chair of the board of NewB, said: “Our co-operators have sent a particularly strong signal today. They feel there is a big need for a Belgian bank in the service of our planet and society. And they have truly voted for the alliance of their co-operative with vdk bank, which will allow them to achieve this ambition more quickly and more completely. We are impatient to begin this collaboration, which will allow the emergence of a solid and sustainable bank for all people in Belgium.”

Leen Van den Neste, chair of the management board of vdk, said: “We are extremely satisfied with the result of the vote. The fact that such a large majority of co-operators say ‘Yes’ to our common project gives us wings. We look forward to welcoming NewB customers and making sustainable banking a reality for the whole of Belgium with NewB.”

She added: “Our ambition is clear: we are in the process of building a solid and sustainable bank for all of Belgium. All the lights are now green for it. We are delighted.”

Launched in 2019, NewB obtained its banking licence in January 2020. Its products included accounts, payment cards, insurance, investment products and green credits, with a total of 20,000 clients with €180m in deposits. In 2022 the bank was placed under the supervision of a court-appointed administrator last year after failing to meet failed to meet a €40m capital requirement set by the National Bank of Belgium.

In response, NewB launched a petition on 22 September 2022 calling for an ethical and sustainable bank which attracted signatures from 37,060 citizens and 110 organisations. The bank also launched launched two online forums, in French and Dutch, which brought together over 700 people to discuss its activities and plans.

A Flemmish co-operative bank rooted in the Christian labour movement, vdk has similar policies to NewB – it excludes fossil fuels from its investment portfolio and is a member of the Global Alliance for Banking on Values.

The two co-operatives have not disclosed how much vdk will be paying for NewB’s customer portfolio.

This article has been amended to include additional information on the partnership.