A not-for-profit bank based in Winchester, Hampshire Community Bank, has gone into administration. This has disappointed investors, including two Southampton universities. The bank, established in 2014, aimed to support local businesses with tailored loans and allocate 50% of profits to community grants. Despite an ambitious goal to transition into a retail bank, regulatory licensing requirements could not be met with the funding and timelines available.

Portsmouth City Council contributed the largest share of funding, investing £3.75 million (60% of total funding). Other backers included Eastleigh Borough Council, Winchester City Council, and community-focused organizations like Local First CIC. The University of Southampton invested £300,000. They also had plans to increase this to £400,000, while Southampton Solent University contributed £75,000.

Both universities expressed disappointment, emphasizing that their investments were based on thorough due diligence and expectations of local community benefits. Southampton Solent reassured that the financial loss would not impact its operations.

Investors began withdrawing support last year, citing insufficient progress toward securing a banking license, which ultimately led to the board’s decision to wind up the enterprise. Millions of pounds in public funds have been lost, marking a significant setback for the region’s ambitions of creating a community-driven financial institution.

This collapse highlights critical lessons for managing community-driven initiatives. Financial sustainability is paramount, requiring robust plans and contingency funding to meet regulatory hurdles. The bank’s failure to secure its retail license underscores the need for realistic timelines and alternative pathways. Gradual scaling, rather than rapid expansion, can stabilise operations before pursuing ambitious goals.