Charity Bank lays foundations for growth

By May 06, 2015

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Expanding its workforce, improving infrastructure and moving to larger premises

Charity Bank, the ethical bank that uses savings to make loans to charities and social enterprises, today (6th May 2015) announced its annual results for the year ended December 2014. These showed the growth in its capital resources and a loss in line with the Board’s expectations reflecting investment in its team and infrastructure, as it increases its capacity to serve a growing community of savers and borrowers.

Charity Bank’s share capital increased by £5.5 million, enabling it to increase its lending. This incorporated the investment by Big Society Capital (BSC) of £4.5 million in its ordinary shares on 28th March 2014 under a conditional commitment by BSC to invest up to £14.5 million of ordinary shares in Charity Bank in three successive amounts between 2014 and 2016.

Charity Bank generated 155 loan applications worth £70 million in 2014, more than double the value of applications in 2013 (£32 million) and made commitments to lend worth £33 million, almost three times the value of commitments made the previous year (£12 million).

An operating loss of £1,067,000, compared to a loss in 2013 of £804,000, reflected both the investment in Charity Bank’s capacity and the restriction on its ability to start to grow its lending until it had secured the first investment instalment from BSC.

In another strong endorsement of Charity Bank’s plans to grow, the Mercers’ Charitable Foundation invested a further £1 million on 30th March 2015, increasing its shareholding from £200,000. This investment makes it the third largest shareholder in Charity Bank after Big Society Capital and the Charities Aid Foundation.

Drawn loans have increased 10% to £61 million in the four months to the end of April 2015, showing that Charity Bank’s actions are beginning to bear fruit.

George Blunden, chairman of Charity Bank, says: “Charity Bank’s journey began with a group of ethically-minded investors and depositors who put their money with us because they wished to see it do good. As we position ourselves for growth, we do so as a bank whose ethos and values remain unchanged from its founding charitable objects.

“Our borrowers tell us that more than two-thirds of the projects we supported last year would not have gone ahead without us.”

Patrick Crawford, chief executive of Charity Bank, says: “The support that we received from BSC last year has enabled us to grow our team and build our capacity to help more organisations reap the benefits that loan finance can offer. We exist to provide flexible loan finance to help charities and social enterprises achieve their goals and we seek to find ways of saying ‘yes’ to those making a positive impact on society when others say ‘no’.

“Looking forward, we aim to have £250 million worth of drawn loans and to hold £300 million of savers’ money by 2019.”

Charity Bank is the bank of choice for social sector organisations that need a loan; it can lend at competitive rates from £50,000 to £2.5 million, or in the case of Housing Associations up to £3.5 million, and larger amounts in partnership with other social lenders.

In early-March Charity Bank moved to a bigger head office in Tonbridge in order to accommodate its larger head office staff numbers and to bring staff into one building and so improving efficiency.

“Charity Bank’s journey began with a group of ethically-minded investors and depositors who put their money with us because they wished to see it do good. As we position ourselves for growth, we do so as a bank whose ethos and values remain unchanged from its founding charitable objects. Our borrowers tell us that more than two-thirds of the projects we supported last year would not have gone ahead without us."

- George Blunden, chairman of Charity Bank