Looking for a truly ethical bank? We've found one.
The news that the ‘ethical’ Co-operative Bank is to be taken over by not-so-ethical US Hedge Funds is likely to come as a blow to those who were trying to deal with a bank with a heart. Many Co-operative bank customers might like to jump ship, but are left looking at the alternatives and wondering whether it might be preferable to drown after all. But there is another option- Reliance Bank.
You probably haven’t heard of Reliance Bank, it’s small and it changed its name not so long ago- it used to known as the Salvation Army Bank. But if it’s ethical you’re looking for, they don’t get much more do-good than this.
Founded in 1890 it has assets of more than £200m, much of it from churches and charities as well as private customers. Its mission statement says it wants to "stand out as a bank with a Christian and ethical conscience” and to “deliver a personal, excellent and efficient banking service across a range of competitive financial products.” Very odd, for a bank.
Throughout the financial crisis, Reliance Bank has remained steadfastly in profit, owing to its low-risk, ethical business model. MD Paul Underwood, said: "The other banks are being encouraged to go back to basics. We never deviated from that in the first place." The word ethical crops up frequently throughout their published accounts and even if you don’t agree with them on theological grounds, no-one ever accuses the Salvation Army of doing bad things for people.
However, despite still being owned by the Salvation Army- who receive a donation of 75% of its profits, it seems the one thing even this bank can’t get away from is bankers bonuses. Last year, the bank paid its top five managers a bonus of £2,446. Not per person, they shared that total amount, which would work out at £489.20 each. Reliance says it has an absolute ceiling on bonuses of 10% of salary, but clearly these bonuses didn’t even come close to that.
So what’s not to like about Reliance Bank? Its 5,000 customers are, naturally, covered by the Financial Services Compensation Scheme, same as any other bank, and it offers attractive mortgage rates, currently starting at 2.49%. But you will be waiting a long time for your credit card to arrive in the post- according to the boss, the Salvation Army who owns the bank “thinks credit cards are part of the problem with society." Bit like most banks, really…