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Another former Co-op chief refuses to take blame for bank’s troubles

Former Co-operative Financial Services chief executive David Anderson has refused to take the blame for the bank’s troubles despite overseeing the merger with Britannia Building Society.

Anderson worked at the Co-operative Bank from 2005 to 2009 and led the 2009 Britannia merger, which has been heavily criticised by MPs. The deal led to the Co-op Bank needing a £550m provision for bad commercial loans this year.

During the Treasury select committee inquiry into the Co-op Bank a string of executives have denied responsibility for failings at the bank including former Co-operative Group chief executive Peter Marks and former Co-operative Bank chairman Reverend Paul Flowers.

The Government is overhauling the approved persons regime for deposit-taking institutions to introduce much greater individual responsibility into the sector.

In April this year the Co-op Bank withdrew its bid to buy 632 Lloyds Banking Group branches after it discovered a £1.5bn capital black hole in its balance sheet.

Earlier this month the bank unveiled a rescue plan that would see the Co-op group take a 30 per cent stake and bondholders controlling 70 per cent.

Speaking to the TSC today, Anderson said the £550m provision was not the only cause of the Co-op’s problems.

He defended due diligence on the deals conducted by Co-op Bank and its advisers and blamed poor management since he left the organisation in 2009.

Anderson pointed the finger at the “distraction” of buying 632 Lloyds’ branches with an estimated £100m spent on the failed bid.

He also blamed a £500m write-off for an IT project, £300m provisions for payment protection insurance misselling and an accounting change to make loans in default after 30 days instead of 90 days.

Anderson said: “The fact there are some write-offs is inevitable and only £80m of those loans are actually losses. A provision of £550m alone would not have created the problems we have now.

“Clearly the loan book was considerably worse than we thought it was going to be, and I wouldn’t represent it any other way, but I don’t believe it is sufficient to create the situation the bank now finds itself in.”

Anderson, a former Yorkshire Building Society chief executive, launched a robust defence of the mutual model in the wake of the crisis.

He said: “In every sector there are businesses that do well and those that make mistakes and it is clear mistakes were made in this case. I fundamentally disagree with anyone who says it undermines the financial mutual model. Successful mutuals are a big and important part of our financial landscape in the future.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. And i thought Pele had the best body swerve i’d ever seen

  2. Ah yes ! the good “ole” ” it wasn’t me guv it was all in perfect working order when I left”

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