Regulators Announce Package to Boost Growth in UK's Mutuals and Co-operatives Sector
The Financial Conduct Authority (FCA) and the Bank of England, together with city minister Lucy Rigby, are set to announce a new package aimed at bolstering growth in the UK's mutuals and co-operatives sector from Rochdale. This plan comes after a year-long review, prompted by Labour's manifesto commitment to double the mutuals and co-operatives sector, currently valued at over £223 billion in assets.
The sector includes approximately 8,400 co-operative and community benefit societies with about 30 million members across financial mutuals. The review highlighted challenges mutuals face in scaling, investing in technology, and competing with private firms.
The announced reforms will streamline regulations and simplify applications for new mutuals, introducing bespoke pre-application support to assist applicants. Additionally, there will be a new mutual societies development unit offering expert advice. Discussions around mergers and acquisitions within mutuals are also part of the plan, recognizing that such strategies can drive growth. Recent sector activities such as Nationwide’s acquisition of Virgin Money and Coventry’s purchase of Co-operative Bank serve as examples.
Nikhil Rathi from the FCA emphasized that these reforms aim to support long-term sustainable growth and create a more competitive landscape for mutuals. Laura Wallis of the Bank of England noted that while mergers can be a viable path to scaling up, regulators remain neutral regarding the overall sector structure. Last year, two building societies expanded by acquiring retail banks, demonstrating diversification within the sector.
