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NewB informally receives the green light to become a bank

© Belga

The Belgian National Bank recently estimated that the conditions were in place to grant a banking licence to the NewB cooperative that was launched in 2011, L’Echo and De Tijd report on Tuesday.

NewB – a Belgian cooperative – is looking to build an “ethical and sustainable bank at the service of a society that respects the planet and human rights.”

Nothing has as yet happened formally, because it is the European Central Bank (ECB) that has to decide. The single supervisory mechanism planned for a banking union in the eurozone effectively envisages that the decision whether or not to grant a banking licence is Frankfurt’s responsibility, whatever the size of the company under consideration.

Last-minute concerns on the part of the ECB cannot be ruled out, but it is likely that Frankfurt will endorse the favourable opinion of BNB, making it all the more likely that the case has already been looked into jointly by both regulators, the one national and the other European.

As the law provides for a period of 12 months from the submission of the license application, the ECB will have to decide on the granting of a license by 24 February at the latest.

Potential investors were previously assured by NewB that should any problem arise which prevents the bank from obtaining a licence, their money will be refunded, promised director Koen De Vidts. If the response of the ECB is positive, though, the bank hopes to start its activities in May next year.

NewB will offer banking for the public: current accounts, savings accounts and medium-term loans. The initial rate of interest on deposits will be 0%, at least until the end of 2024.

Current account holders will not be permitted to go into overdraft. They will be issued with a bank card at a cost of €20 a year. Withdrawals from a cash machine will cost 75 cents each.

According to the bank’s prospectus, it expects to have 108,000 current account holders by the end of 2024, and 35,000 savings accounts.

The bank was conceived soon after the global financial crash of 2008 as an “ethical and sustainable” alternative to commercial banks. “The goal of NewB is to offer simple and transparent banking services which follow the principles of sustainability and ethics,” the investment prospectus reads.

The Brussels Times

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