The Co-operative (Co-op) Bank says it’s “business as usual” for its four million customers, as it announced it has put itself up for sale.
The Co-op is inviting offers for 100% of the share capital of the bank, although it says a sale is “dependent on agreeing an offer that is right for our key stakeholders, including customers”.
The move comes after the Bank’s near collapse in 2013 when a black hole was found in its finances; the Bank didn’t have enough capital – money banks must hold to protect customers from any potential risks. The Co-operative Group, which previously fully owned the Bank had to sell shares to investors and hedge funds. It now owns just 20% of the Bank.
Commenting on today’s news, Liam Coleman, chief executive officer, says: "Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition. The Co-operative Bank delivers an attractive banking proposition that is differentiated by our values and ethics and is highly valued by our four million customers. Customers value The Co- operative Bank and our ethical brand is a point of difference that sets us apart in the market.
“While our plan has been impacted by lower for longer interest rates, the costs associated with the sheer scale of the transformation and the legacy issues we faced in 2013, there is considerable potential to build the Bank’s retail franchise further using the strength of the brand, its reputation for strong customer service and distinctive ethical position.”
The Bank is expected to report “significant” losses for the year ending 31 December 2016, although it says these losses are predicted to be less than the previous year where losses of £610 million pre-tax were posted. The full 2016 results will be announced in March.
What does the sale mean for customers?
Co-op says today’s announcement has “no direct impact” on the products customers have or the service it provides.
Savers’ cash will also continue to be protected up to £85,000 under the Financial Services Compensation Scheme (FSCS).
In a statement on its website it says: “As we go through the process, it remains very much business as usual, and our number one priority is to continue to provide the high quality service that is valued by our customers.”
What about staff?
Co-op says it is too early to say precisely what the impact on staff will be.
In a statement on its website it adds: “We are committed to keeping colleagues and customers informed of any material changes that will affect them, when this becomes clear.”