The UK’s Co-operative Bank is working with consulting firm PricewaterhouseCoopers (PwC) to sell some of its non-core operations, according to a report by Sky News.
The Bank has allegedly asked the Big Four accounting and tax firms to help it find buyers for a portfolio of commercial real estate, private finance initiatives and wind-farm loans. A spokeswoman for the Bank said it had no comments on the story.
As of January, the Bank’s former deputy chief executive, Liam Coleman, has succeeded former chief executive Niall Booker, whose contact expired at the end of last year.
In April 2016 the Bank reported a loss of £610.6m before tax for the year ending 31 December 2015 – more than double the previous year’s loss of £264m. Mr Booker said at the time that the organisation was expecting to return to operating profitability in the Core Bank before the end of 2017.
Shaun Fensom, of the Save Our Bank campaign, thinks the Bank should seek to raise capital from its customers. Launched in 2012, Save Our Bank is a union of Co-op Bank customers who want to ensure the bank keeps its ethical policy.
The Bank’s ethical policy was amended in 2015 following a consultation with 74,000 customers, colleagues and stakeholders. Around 84% of those surveyed said the Bank’s ethical policy was the main reason for banking there.
Mr Fensom said: “We do not have specific information from the bank on this story. Given the challenges faced by the Bank and its strategy to focus on ‘core’ business – where a profitable enterprise looks viable – it’s not surprising if it is following this route. Neither is the news that the Bank is taking advice.
“However, in the same Sky News story the point is made about the very loyal customer base the Bank has. We believe that is because there is a reservoir of people who want to see the Co-op stick to its ethics and succeed doing so. Over 10,000 of them are Save Our Bank supporters.”
The ultimate aim of the Save Our Bank group is for the Bank to return to majority co-operative control. Its former owner, the Co-operative Group, sold most of its shares to private shareholders in 2013. The mutual retains a 20% share in the Bank.
“The Bank needs capital. We believe the Bank should take the co-operative approach and look at ways to raise new capital from customers,” added Mr Fensom.
“We know that many thousands of our supporters would be prepared to put some money at risk to help increase the customer ownership and so start the process of re-mutualising the Bank. This would build confidence in the markets and could attract new customers.”
