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Co-op plans strategic review to plug bank capital shortfall

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Incoming Co-operative Group chief executive Euan Sutherland is launching a strategic review of the business in a bid to solve its capital problems.

Last week, Moody’s downgraded the bank’s rating to junk status after loan portfolios from Britannia Building Society deteriorated leaving a black hole of up to £1bn. The rating agency warned the bank may need taxpayer support.

Sutherland will take over from Peter Marks at the mutual’s annual meeting on Saturday and the FT reports he will start a review of all businesses from funeral homes to banking.

Co-operative Bank chief executive Barry Tootell resigned the morning after Moody’s downgrade. The bank’s bid to buy 632 Lloyds Banking Group branches under Project Verde collapsed last month.

The Telegraph reports the bank is considering clawing back bonuses from senior staff such as ex-chief executive Neville Richardson, who was in charge when the Co-op bought Britannia in 2009.

Richardson left the bank in 2011 with a £4.6m package including a £1.4m payment for “loss of office” and £1.39m compensation for leaving. 

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Strategic Review = Do we sell bits of it or all of it.

  2. Oh my god I had no idea that Neville Richardson’s pay off was so massive, yet the way myself and former Co-op Bank colleagues were treated after he took over was disgusting. Not an ethical company at all, this is just PR.

    What goes around comes around!

  3. Unbelievable. The CIS was a trusted company and a great place to work until some greedy b******s decided to rip the hear out of it – I would urge everyone to ge their money away from the Co-op asap

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