The Co-operative bank announces sale

Manchester based the Co-Operative Bank has announced it is putting itself up for sale.

This morning the Bank said it is inviting offers to acquire all of its shares after it nearly collapsed in 2013 and was bailed out by US hedge funds.

At present, just 20% of the Co-Operative Bank is owned by the wider Co-Operative Group.

The bank has four million customers and has stated that its customer-led ethical position makes it “a strong franchise with significant potential” when it comes to a potential sale.

The Royal Bank of Scotland has been trying to off-load a number of its branches for some time but has so far been unable to secure a deal.

The sale would help the bank build its capital base and meet longer term UK bank regulatory capital requirements. Co-Op Bank said it has so far struggled to do so due to the continuing impact of low interest rates.

The Co-op Bank also said it expects to report a “significant” loss for the year ending 31 December 2016.

Commenting to BBC News this morning, the bank’s chairman Dennis Holt said:

“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.”

Mr Holt said that the board has always been clear that it would need to build capital for the future:

“We are now commencing a sale process, alongside other options. The Bank’s ethical heritage and customer proposition will be a central consideration in this.”

Liam Coleman, chief executive, said:

“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.”