The UK’s Co-op Bank, which was wholly bought out by hedge funds in 2017, is reportedly looking for new buyers.
According to a Sky News report on 18 December, the hedge funds which own the bank are working with investment bank Goldman Sachs to court potential buyers and initiate discussions with potential bidders.
Sky also claims that the Co-operative Bank’s chief executive, Andrew Bester, has held talks in recent weeks with a number of Britain’s biggest retail banks, including Barclays, Lloyds Banking Group and Royal Bank of Scotland.
In the third quarter of last year, the company reported a pre-tax loss of nearly £119m, caused by a combination of payment protection insurance (PPI) compensation charges and the ongoing cost of separating its IT systems from the Co-op Group.
In 2013, failings in management and governance led to a capital shortfall of £1.5bn in the Co-operative Bank, which at the time was wholly owned by the Co-op Group.
Its continued use of ‘Co-operative’ in its name was called into questioned; although in 2017 Co-operatives UK confirmed that “the bank continues to operate under its existing name, with a commitment to co-operative values, with our assent.”
Although the bank and Group are no longer linked, the bank has also continued to fund co-operative training and development through The Hive project (delivered by Co-operatives UK) and recently signed a formal recognition agreement with The Customer Union for Ethical Banking, a member-owned co-operative set up to represent customers who are keen to ensure the Bank maintains and extends its customer-led Ethical Policy.
