Co Op Bank

Co-op Bank launches sale process




The Co-operative Bank has revealed that its board is to commence a sale process as well as look at ways to build capital.

Since 2013, the Co-operative Bank has looked to implement its turnaround plan as it attempted to rebuild its services with a customer-focused retail bank.

The board said it was looking to solicit proposals for the acquisition of 100% of the share capital of the bank and has discussed the plans in full with the Prudential Regulatory Authority.

"The bank has met its Pillar 1 regulatory capital requirements continuously since 2014 and expects to continue to do so,” said Dennis Holt, chairman of the Co-operative Bank.

“At the same time, since we began work on the bank's turnaround, the board has always been clear that we would need to build capital for the future.

“We are now commencing a sale process, alongside other options.”

The Co-operative Bank is expected to make a significant loss for the year ending 31st December 2016, but less than the loss reported for 2015.

The bank currently serves four million customers and stated it had already reduced its cost base by over 20%, sold over half its non-core portfolio, made critical IT improvements and dealt with major legacy issues of the past.

The Co-operative Bank said these changes had contributed to its recent significant losses and had been achieved despite a challenging interest rate environment, increasing regulatory capital requirements being applied to all UK banks and without recourse to government funding. 

“Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition,” said Liam Coleman, CEO of the Co-operative Bank.

"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 Co-operative Bank’s board will hold the right to alter any aspect of the formal sale process or to terminate it at any time and said it would make further announcements as appropriate.

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