Warrington Council pays £30m for stake in new bank

Warrington Town Hall Image copyright Google
Image caption Warrington Borough Council says the bank will lend to local businesses to "support the local economy".

Warrington Borough Council is to spend £30m on buying a 33% stake in a new bank which will have its northern headquarters in the Cheshire borough.

The Labour-led authority will partner an unnamed "major city financier" to launch Redwood Bank in August.

The bank will target lending to small northern firms, said the council, which hopes to take a share of the profits.

The Liberal Democrats said they had "concerns" about the level of "risk" in the plan.

"What concerns us slightly is the ratio of the risk council is taking on board (compared to) the benefit to local businesses," said councillor Bob Barr.

But Labour councillor Russ Bowden said the deal would "support the local economy and help business thrive".

"It's an important part of securing a better future for borough," he added.

A council report said Redwood Bank hopes to receive a banking licence later in 2017, with the bank launched in August.

The authority hopes to generate income through interest payments, and insists the bank's business plan would be "monitored closely" to protects its investment.