Co-op launches investigation into bank failings - Banking - News - Moneyfacts

News

Co-op launches investigation into bank failings

Co-op launches investigation into bank failings

Category: Banking

Updated: 12/07/2013
First Published: 12/07/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

An independent enquiry into failings that led to the £1.5-billion capital shortfall at The Co-operative Bank is due to be launched in September.

The announcement was made today by the parent company of the bank, The Co-operative Group, which said the investigation, due to begin in September, will be led by Sir Christopher Kelly, chair of the King's Fund and the Responsible Gambling Strategy Board.

Key issues to be investigated include the decision to merge The Co-operative Bank with Britannia Building Society in 2009 and the proposed acquisition of the Verde assets of Lloyds Banking Group.

The Co-operative Group said that the enquiry will include analysis of strategic decision making, management structures, banking culture, governance and accounting practices at the bank. The findings will be presented at the Group's annual meeting in May 2014.

The announcement follows a review of the bank's capital position and confirmation by the financial regulator, the Prudential Regulation Authority (PRA), that the bank had a capital "black hole" amounting to £1.5 billion.

Unlike rescue plans carried out at the height of the credit crisis, which relied on help from taxpayers, The Co-operative Bank will instead raise capital via a 'bail in' process, whereby shares in the bank will be offered to existing bondholders. Shares will also be listed on the stock market.

The Co-operative Group is also expected to provide extra capital to help make up the shortfall.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Simple measures to improve banking security

The payments industry is gearing up for some big changes in the near-future, with the announcement of some key improvements that should help all of us be more secure when banking online.

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!

Top cashback deals for festive rewards

Savvy shoppers will no doubt be looking to make the most of their hard-earned cash at this time of year, but there isn’t much time left to work out which are the good deals and which are the bad, so it’s time to take action!
 
Close