max temp: 11°C

min temp: 10°C

ESTD 1874 Search

Banking: Co-operative Group’s stake in Co-op Bank to be reduced again under fundraising plan

09:13 09 May 2014

The Co-operative bank in Queens Street, Ipswich.

The Co-operative bank in Queens Street, Ipswich.

The Co-operative Group’s stake in the Co-op Bank is to be reduced further it emerged today as the troubled lender unveiled details of a £400million rescue fundraising.


The mutual currently owns 30% of the bank but this will be cut because the business is not taking up all of its rights in the offer to shareholders.

The Co-op Group said it still expects to remain the bank’s single largest shareholder, although the exact size of its stake will not be known until the fundraising is complete in a few days’ time.

The bank’s four other major shareholders, who include US investment firms, are taking part in the fundraising but the Co-op is buying shares using funds raised from selling some of its £120m entitlement as it looks to keep its holding above 20%.

If the stake in the bank falls below 20%, a guarantee that it must uphold its ethical co-operative values will no longer stand, although the business could still choose to keep it.

The bank, which recently reported a loss of £1.3bn for 2013, needs the additional cash from shareholders in order to cover the cost of legacy issues, such as insurance mis-selling.

Chief executive Niall Booker said the additional funds will give the bank room to begin its turnaround plan, which will see it target retail and small business customers.

He said: “The business plan is being implemented and there have been some encouraging early signs. We have started to simplify the business, reduce costs and de-risk the non-core assets, while remaining committed to the values and ethics that continue to set us apart.”

Mr Booker also paid tribute to chairman Richard Pym, who was brought in at the height of the bank’s financial crisis and is due to leave by the end of the year.

He said: “Richard has been instrumental in the important governance changes which have been implemented at board level and his relentless appetite to bring about change and improvement has been an inspiration to us all.”



Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files

Please log in to leave a comment and share your views with other East Anglian Daily Times visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by East Anglian Daily Times staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique East Anglian Daily Times account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

Alistair Ponder, Leanne Castle and Alex Till of Menta receive their trophy from Declan Curry at the National Enterprise Network annual awards.

Bury St Edmunds-based enterprise agency Menta has won an Enterprise Support Organisation of the Year accolade at the National Enterprise Network’s annual awards.

An artist's impression of the new Hampton by Hilton hotel to be built and Stansted Airport,alongside the existing Enterprise House office complex, right.

A new £45million hotel is to be built close to the main terminal at Stansted Airport, bringing the number of hotels on the airport site to five and creating around 60 new jobs.

Frank Brumby, eastern region chairman of R3.

“Zombie” businesses are on the march in the East of England, according to a survey by insolvency trade body R3.

Royal Bank of Scotland has passed the latest Bank of England stress test, but missed fulfilling one of the capital guidance criteria.
Photo: David Cheskin/PA Wire

All seven of the UK’s largest lenders have passed the Bank of England’s latest “stress test”.

Max Chmyshuk, founder and managing partner at Fleximize.

More than £25million-worth of credit applications by small and medium-sized enterprises (SMEs) in eastern England are being rejected by banks every month, according to alternative lender Fleximize, which is based Ipswich.

Most read

Most commented

Topic pages

Local business directory

Our trusted business finder

Property search

e.g. Oxford or NW3
Powered by Zoopla

Digital Edition

Read the East Anglian Daily Times e-edition today E-edition

Great British Life

Great British Life
MyDate24 MyPhotos24