WARRINGTON Borough Council is being urged to exit a ‘poorly performing’ investment into a bank after it reported a pre-tax loss of £1.7 million.

The latest results of Redwood Bank Limited, published for the year ending December 31, 2020, reveal continued losses at the bank.

The town’s Conservatives, the Opposition group, have pointed to the Labour-run authority – via its investment in Redwood Financial Partners Ltd, the holding company of Redwood Bank – having a significant financial exposure following an investment of £32 million in Redwood Financial Partners Ltd for one third of its shares.

Redwood Bank has posted a pre-tax loss, for the year ending December 31, 2020, of £1.7 million – which is an increase of half a million pounds over the losses posted in the previous year.

The Conservative group remain ‘extremely concerned’ regarding the investment in Redwood Financial Partners Ltd and its subsidiary Redwood Bank. It also highlighted that the bank has failed to make a profit since the council’s investment into it.

At the recent full council meeting, the Conservative group proposed a motion to require the council to urgently consider the divestment of Redwood Financial Partners and its subsidiary Redwood Bank, in the interest of protecting the people of Warrington from the risks associated with the start-up company.

Cllr Ken Critchley (CON – Appleton) said: “Further losses at Redwood Bank only reinforce the need for the council to exit this poorly performing investment.

“The council have invested £32 million for one third of a loss-making company, no dividends have been received and the true value of the council’s investment is being questioned by the external auditor.

“It’s time that the council exited from this high-risk company.”

But the council says it continues to be pleased with its investment into Redwood Bank.

A spokesman added: “It was never solely about driving income but about providing a lever to support regional SMEs.

“Furthermore, given the turbulence caused by the pandemic, the bank is in a comparably strong position and continues to perform in line with the original business plan agreed in 2017.”