Unity Trust Bank History
Unity Trust Bank
Unity Trust Limited opened its doors for trading on May Day 1984 – an appropriate launch date for Britain’s first trade union bank.
The idea of a trade union bank was not entirely new. Israel’s Bank Hapoalim and Germany’s BFG were already well established within the top 100 banks worldwide, proving that a trade bank could be commercially successful while remaining true to its founding principles. Both banks were researched and consulted regarding the formation of Unity.
Unity’s policy was to be based on prudent, profitable commercial lending solely within the UK. Unity aimed to achieve its objectives by combining the resources of the trade union and co-operative movements.
The Co-operative Bank agreed to match the trades unions’ investment and supply management expertise for the initial launch period. Lewis Lee, chief General Manager of the Co-operative Bank led Unity as its first Chairman, with the Co-operative’s General Manager, Terry Thomas, as Managing Director and David Basnett, General Secretary of the then GMBATU as first President.
An equity contribution from the trades unions of £1.25 million, together with a similar amount from The Co-operative Bank, provided Unity’s start-up capital of £2.6 million, which quickly grew during the remainder of 1984 to over £4 million. At the end of that year, the balance sheet totalled £16 million.
Unity Trust Limited was well on its way to becoming a fully-fledged UK bank.
Unity Trust completed its first year as a licensed deposit taker, offering a range of banking and other services.
In one year, Unity had extinguished the remainder of its start-up costs. Its balance sheet had grown to £40 million and its deposits to over £35 million.
On January 2nd 1986, Unity Trust’s status changed from private company to public limited company.
Following a rights issue in 1986, which enabled more trades unions to become founder members, fourteen more unions joined, plus three federations, including the TUC. Fifty-eight trades unions, representing some 80% of all trade union members, were now shareholders.
In 1987, just four years after its launch as a licensed deposit taking institution, Unity Trust plc acquired full status as a bank under the terms of the Banking Act 1987.