The news that the Co-operative Bank has put itself up for sale has sent chills down the cooperative sector across the globe. The Bank had almost failed four years ago and it was salvaged by US hedge funds in the nick of time. The Bank’s board had decided to look for buyers.
Because of massive losses on property loans, the Co-op Bank in London – a big retail bank owned by the Co-operative Group was on the brink of collapse in 2013. The bank’s crisis was compounded by a scandal involving alleged drug taking by its former chairman uncovered in the same year. Nearly 60,000 customers left the bank in 2014, reports the Financial Times.
Meanwhile, the High Street bank has made “considerable progress in delivering turnaround plan. However, the bank says “Lower for longer interest rates and higher than originally anticipated transformation costs are constraining organic capital generation and as a result gathering new options to raise cash, such as a sale of the business”.
Sources close to the bank say since 2013, the bank has successfully addressed significant legacy issues, reduced the cost base and rebuilt franchise and customer proposition. The co-operative bank delivers an attractive banking proposition that is differentiated by values and ethics and is highly valued by 4 million customers.
The Co-op Bank has 4 million customers across the UK. The bank made a loss of £177 million in the first half of 2016. Originally founded in 1872, the Co-op Bank has a reputation as an ethical bank, avoiding things like the arms trade, animal testing, and sweatshop labour.