Co_op Bank Financial Strength Risk

Co-op Bank Financial Strength Risk.

Co-op has Bank has had its credit rating downgraded by Moody’s, this has fueld speculation that the Co-op could need help from the taxpayer for its banking arm, after the downgrade, Moody's warned it could face losses it may not be able to afford.

This comes soon after a deal with Lloyds Banking Group to purchase 632 branches, which analysts could support business.

Moody’s also suggested that Co-op was hit by a deterioration in its commercial real estate portfolio.

Our View

We assume Co-op will be taking remedial action but as ever, the news may create some concern for investors.  Provided though, investment limits are below the finanancial services compensation threshold of £85,000 and the fact that the British Government has committed to not let any banking group 'go under', we see no real need for concern.