Social finance body Charity Bank increased loans by over a quarter last year and is still confidently looking ahead despite Brexit
Social finance body Charity Bank increased its loan book by 26% last year.
Announcing its end of year results for 2015, the bank that uses savings to make loans to charities and social enterprises said it grew the amount it gave out from £53.6 million in 2014 to £67.8 million in 20156.
Charity Bank also said it has made a strong start to the current financial year with £40 million of new loans approved for the first six months of 2016, as against £34 million for the whole of 2015.
This increase is due to renewed borrower confidence after a challenging period for the social sector caused by the changes to welfare and social housing announced in the Budget in July, followed by the implementation of the Etherington Report on fundraising published in September and the changes in the Comprehensive Spending Review in November.
In line with the Board’s expectations, operating losses increased to £2.1 million, reflecting further investment in the bank’s team and infrastructure, as the bank increased its capacity to serve a growing community of savers and borrowers. The conversion of the bank’s financial reporting framework from UK Generally Accepted Accounting Practice (UK GAAP) to International Financial Reporting Standards (IFRS) also had an impact.
We are here to help charities and social enterprises adapt, take advantage of new opportunities and create a better world - Patrick Crawford
George Blunden, chairman of Charity Bank, said: “In 2015 we grew our loan book by more than a quarter as we responded to the funding needs of charities and social enterprises. Our growth has continued with a record £40 million of new loans approved in the first six months of 2016; this is more than we have approved in the whole of any previous years.”
In 2015 The Mercers’ Charitable Foundation invested £1m, increasing its shareholding in Charity Bank to £1.2m, and Barrow Cadbury Trust gave additional backing through a £250,000 investment in the first week of January 2016.
Blunden says: “These investments provide a strong endorsement of what we do and express confidence in our future. Following these injections of capital we now have the opportunity to build on our track record of effective and responsible lending in the social sector. We have begun to offer larger loans to larger organisations, while continuing to provide loans to smaller charities and social enterprises in the way we have always done.”
Patrick Crawford, chief executive of Charity Bank, says: “Our pipeline of approved loans has never been as strong and reflects the confidence in the social sector. Following the vote to leave the EU in the referendum of 23rd June, we are ready to respond to both existing and new loan needs. We are here to help charities and social enterprises adapt, take advantage of new opportunities and create a better world.”
