Economy
Church of England ready to help launch new ethical bank from RBS division
A private equity consortium, backed by the Church of England, has bought upto half of the former Williams & Glyn’s branches from the Royal Bank of Scotland (RBS).
The £600m deal has been brought forward by a consortium formed by investment firms Corsair Capital and Centrebridge, and will see the Church of England being the single largest investor with a 10% stake. The church is expected to use its influence to ensure the new bank is “ethically strong”.
Lord Davies, Corsair’s vice-chairman, will be part of the new bank, promised to address the issue of a lack of women in banking boardrooms. The chief executive is expected to be John Maltby, previously head of commercial banking at Lloyds.
In June, the Church Commissioners – responsible for the church’s investments – said it was considering bidding to take control of 315 branches of RBS, in order to create a new ethical bank. The decision was welcomed by Laura Willoughby of Move Your Money campaign, who said that another “values-led bank” on the high street was what people were demanding.
With roots dating back to the 18th century, Williams & Glyn’s Bank existed independently until 1985. It was then fully absorbed by RBS.
RBS has been forced to offload the branches by the EU commission, because it was bailed out by taxpayers in 2008. The bank is looking at reprivatisation in 2014, with its previous chief executive Stephen Hester resigning in June with £1.6m payoff.
The Church of England was criticised in July after the Financial Times revealed it had indirectly invested part of its portfolio in payday lender Wonga. It was rapped more recently for its funding of General Electric (GE) – in which it held £10m in shares.
Further reading:
Small is beautiful: why alternative banks need to step up to the mark
Moving investment onto ethical footing is better for all, says Church of England
Campaigners angry at size of RBS bonus pot after bank records £5.17bn loss for 2012