Co-operative Bank puts itself up for sale

  • Co-operative Bank puts itself up for sale

Co-operative Bank puts itself up for sale

This involved bondholders swapping their debt for equity in the bank and new bonds.

Since 2013, the Co-Operative Bank has looked to implement its turnaround plan as it attempted to rebuild its services with a customer-focused retail bank.

However, in what is no doubt a cost-cutting move on the part, Capita also revealed that work on an "IT system transformation" had been stopped as part of the settlement deal, which also drastically curtails the length of the deal signed only in November - a sign, perhaps, that the Bank has a buyer in it sights.

In 2013, the bank was rescued by various USA hedge funds after the organisation nearly went bust when it was discovered that the bank needed £1.5 billion in funding in order to remain afloat.

"We also continue to look at other options to build capital for the future".

"Some customers have chosen to bank with Co-op because of its ethical values - unfortunately if it gets taken over or swallowed up you would have to question whether such values would still exist".

"The board is commencing a sale process, something always considered a potential outcome of the turnaround plan, alongside considering other options to build capital and meet the longer-term capital requirements applicable to all United Kingdom banks", the bank said in a statement.

Co-op chief executive Liam Coleman told the market: 'Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition.

The bank's chairman Denis Holt, said the bank still remained inline with its capital requirements as stipulated by the Bank of England's Prudential Regulation Authority. This meant not investing in fossil fuel extraction, the arms trade, genetic engineering and other "non-ethical" sectors. The loss-making bank, which has four million customers, said it expects to keep providing the necessary minimum capital buffers in.

A spokesman added: "We will continue to assess the bank's progress in building greater financial resilience over the coming months".

The Bank is expected to report "significant" losses for the year ending 31 December 2016, although it says these losses are predicted to be less than the previous year where losses of £610 million pre-tax were posted.