A community interest group has come together to set up a community bank in Hampshire, a county in the south of England.

Local First, a Winchester-based team made up of members with previous experience and knowledge of banking has already received a promise of investment from Eastleigh Borough Council and hopes to lend at least £100m ($160m) in its first year.

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Professor Richard Werner, a member of Local First, said: "It’s exactly what is missing in the UK banking landscape.

"The idea is, you gather deposits locally and you lend locally and I think people will like that.

"Banking is actually a highly profitable business and it is really a no-brainer for a local authority to invest in setting up a local bank."

The group is aiming to raise £7m to set up the bank, to be called Hampshire Community Bank, and hopes that figure will be matched by the government to give a total of £14m.

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Mike Battersby, a member of Local First who has previously worked for Lloyds Banking Group and Royal Bank of Scotland, said the bank would be more in touch with local people
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He said: "You will not be coming to work for our bank if you are expecting to walk away with a multimillion-pound bonus based on highly speculative leveraged lending which could go wrong."

Eastleigh borough councillor Keith House said the bank must go through the regulatory process, meaning the council will not be able to give financial support for at least another year.

Local First said they hoped Hampshire Community Bank would be up and running within the next two years.

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