Welsh community bank: Building society pulls out of plan

The Welsh government's plans to set up a community bank have suffered a blow.

The building society that was developing the idea on its behalf said it would have to stop working on the proposals.

Monmouthshire Building Society (MBS) said its decision was down to the "current unpredictability" facing the UK economy.

Wales' economy minister said it was "clearly disappointing" but said the government's vision was "unchanged".

The creation of community bank was a Welsh Labour manifesto commitment going into the 2021 election, with the ambition to open thirty branches across Wales "over the next decade".

The proposal was to establish a mutual bank called Banc Cambria that would be "owned by and run for the benefit of its members" and would improve banking access across Wales.

However because Welsh ministers do not have the devolved powers to deliver such a scheme, it needed an existing regulated financial organisation to develop the plans on its behalf.

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In 2021 MBS stepped forward with the intention of establishing a community banking offer.

But in a statement on Wednesday MBS' Chief Executive Will Carroll said that since then "the UK's economic situation has changed significantly - interest rates are rising, house prices are falling and the cost-of-living crisis continues".

He added: "As a purpose-driven mutual building society, we prioritise our members and the communities they live in.

"This means we won't take any unnecessary risks that could potentially impact on the Society's performance or the trust our members place in us.

"Given the current unpredictability and ongoing challenges facing the UK economy, we've decided to stop working on our plans to deliver a community bank."

Mr Carrol said that was "the right and responsible thing to do."

Updating MSs on the news, the Welsh government's economy minister Vaughan Gething said: "Whilst this news is clearly disappointing, MBS is an independent and commercial organisation, who has invested considerably in its work on community banking to date.

"MBS has received no Welsh government funding, and it is for them to form their judgements on this matter and proceed accordingly.

"Our vision remains unchanged - that is for community banking services to develop in Wales, adding value and choice in the financial ecosystem and supporting community wealth building."

Mr Gething added that MBS would be carrying out a "strategic review" of its approach to the delivery of community banking services, and that the building society did not expect to be in a position to move things forward before the next Senedd election in 2026.