Will Co-op Still Own Co-op Bank
Published / Last Updated on 21/10/2013
Will Co-op Still Own Co-op Bank.
Pressure is mounting at the Co-op with speculation that the Co-op Group, which includes insurance, funerals, supermarkets and the bank, will lose control of Co-op Bank.
Following its failed bid to acquire over 600 Lloyds Bank Branches, debts at the Co-op Bank have been mounting and various external creditors such as investors and large hedge funds appear to be looking to take control.
Co-op has been crippled by failed projects that have been ‘binned’ such as the Lloyds Bank branch purchase fiasco, large scale IT projects being closed down and the icing on the cake, PPI mis-selling compensation.
A bailout deal worth £1.5bn which would have worked, has been undermined by creditors and many suggest that Co-op Bank will move away from the core Co-op group of ethical and fair play and move into external ownership.
Comment
From personal experience, the directors of this firm have seen a number of Co-op financial advisers and salespeople over the years, and to say they were less than ethical and had little financial services knowledge was an understatement. Was this isolated or was this through the culture of the Bank? We cannot say, but does PPI mis-selling really fit with the core code of ethics that Co-op Group has always had, we think not. It is perhaps this and a pressure to make money from the top down that has contributed to the banking arm’s progressive road to failure.
The banking regulator, the Prudential Regulatory Authority (PRA) has suggested that the £1.5bn rescue deal is viable, but we suggest this is more about control of a branded, high street and online banking group rather than rescue.
Deposit investors are protected under the Financial Services Compensation Scheme for UK deposits. We suggest though that it is highly unlikely to ever get into that position and the Co-op Bank will not fail. We just hope for the ‘peace of mind’ of all savers that a solution is delivered quickly to allay fears. No need to panic though, we believe your money is safe.