A NOT-FOR-PROFIT bank based in Winchester has folded to the frustration of two universities, one of which invested £300,000 in the enterprise.

Hampshire Community Bank provided loans to help small businesses across the county.

The Winchester-based operation opened in 2014, with founding investment from councils, universities and a community interest company.

The bank’s board decided to put the company into administration after struggling to pursue an aim of becoming a retail bank.

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Portsmouth City Council’s £3.75million contribution provided the majority (60 per cent) of the funding for the community bank, with both Southampton Solent University and University of Southampton also giving financial support.

Two Southampton universities that invested in the not-for-profit bank have expressed their disappointment at the entity going into administration.

A University of Southampton spokesperson said: “Our involvement in Hampshire Community Bank was made following all the appropriate due diligence checks and an expectation that this enterprise would bring benefits for our local communities, while delivering a reasonable return on investment.

“We are therefore disappointed by this news.”

A Southampton Solent University Spokesperson said: “It is vital that universities work with their local communities, championing worthwhile initiatives and providing support where possible.

“As a minor investor in the Hampshire Community Bank, it is clearly disappointing that this venture has not been successful.

“However, thanks to careful planning this will have no impact on our current or future finances.”

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University of Southampton’s investment was £300,000. Southampton Solent University has not disclosed how much it invested.

The other investors were Local First CIC, Eastleigh Borough Council, and Test Valley Borough Council.

The goal of becoming a retail bank required the company to licensed by regulators.

This was not possible with the funding available and within the necessary timescales, Portsmouth City Council said.