Co-op Bank up for sale but it's "business as usual for customers"

The move comes after the Bank's near collapse in 2013 when a black hole was found in its finances; the Bank didn't have enough capital - money banks must hold to protect customers from any potential risks.

Bank chair Dennis Holt said the organisation was continuing to meet the regulatory capital requirements set out by the Bank of England's Prudential Regulation Authority.

The Co-operative Bank today sought to reassure its 4.1 million customers as the troubled lender was put up for sale.

The Co-operative Group still owns a 20% stake in the Co-op Bank.

Chief executive Liam Coleman added: "Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition".

The Co-op is inviting offers for 100% of the share capital of the bank, although it says a sale is "dependent on agreeing an offer that is right for our key stakeholders, including customers".

But it still expects to make a "significant loss" for past year and said that building up capital has proved hard given low interest rates.

As the board started the possible sale process today, the bank said the move was "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's balance sheet ballooned following a disastrous merger with the Britannia Building Society, and then ran into trouble when it tried to buy more than 600 branches from Lloyds Banking Group.

"The Bank's ethical heritage and customer proposition will be a central consideration in this", said Holt.

"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 bank contracted out its mortgage administration to Capita in a 10-year £325 million deal but the latter said Co-op had withheld payment for these services, while the bank argued Capita had failed to uphold its end of the deal. "Our goal is to ensure the continued provision of the type of co-operative banking products our members want".


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