Co-operative NewB bank will be dismantled

NewB, a Belgian bank that presented itself as an ethical and sustainable alternative to the bigger lending institutions, will be dismantled and soon no longer exist.

A plan to dismantle the fledgling bank is currently in the making, L'Echo and De Tijd report, and once executed, NewB will lose its banking licence and cease to be a bank.

NewB failed to raise the €40 million needed to meet the requirements of the National Bank of Belgium (NBB).

“Our break-up plan aims to get NewB out of the banking business in a professional and coordinated way,” said NewB's CEO Thierry Smets.

“We want to act quickly and reimburse our customers as soon as possible.”

An estimated €170 million is currently deposited in NewB's current and savings accounts. Those customers will be asked to transfer their assets to another bank.

The company, which will not accept any more new customers, promises that it will refund all deposits. It will also have to present a plan for collective redundancies, given that the company employs around 50 people.

Smets did not wish to comment yet in regards to the number of people who will be laid off as a result of the dismantling, given that much of the company’s future will depend on a vote at the general meeting on 26 November.

Two scenarios are on the table at this time: a simple liquidation or the continuation of NewB’s activities outside the banking sector.

In the meantime, NewB said it would “ensure the continuity of its services for the time necessary to guarantee a complete transfer of [customer] deposits to the chosen financial institution.”

When it comes to shareholders in the related open-ended investment company NewB Invest, it is expected they will not be affected, as this is a separate legal entity from the cooperative.