Stop Press March 2026: Since we published this article in 2013, users have reported ‘terrible service‘ and the bank was taken over by Coventry Building Society on 1st January 2025. The actual Co-op is no longer involved in the bank.
Article: A group of investors in the Co-operative Bank has slammed the UK’s banking regulator following its order that the bank must raise £1.5 billion in fresh capital.
Mark Taber, spokesman for 1,300 individual Co-op investors, this week accused the Prudential Regulation Authority of setting an “arbitrary and putative” demand on Co-op Bank, after it told the bank it needed extra capital to comply with new rules.
The warning that its banking arm may need “external support” to plug a near £1bn hole in its balance sheet has even raised the spectre of nationalisation for the stricken bank. Judgment has fallen on the Co-op Bank after it closed the Christian Voice account in 2005, despite its ‘customer-led ethical policy’. See link below.
The new rules may originate with the EU, but Co-op Bank has been left with a massive hole in its capital after acquiring toxic commercial real-estate loans when it merged with Britannia Building Society in 2009.
Last month Co-op Bank asked holders of its preference shares and subordinated bonds, totalling £1.3 billion, to take ‘upfront’ losses by exchanging their securities for ordinary shares and new bonds as the Co-op de-mutualises.
The investors’ fury at the Regulator and their dismay at their conversion into shareholders are just the latest problems to hit a bank which always claimed to be ‘ethical’.
In May, Co-op chief executive Barry Tootell resigned in the wake of a devastating downgrade to the bank’s credit by Moody’s which pushed it down six notches from “investment grade” to junk at the stroke of a pen.
In April, the Co-op’s ambitions to buy just over 630 TSB branches from Lloyds TSB collapsed. The Co-operative knew it was in crisis even while negotiating the agreement which was announced almost exactly year ago.
Andrew Bailey, chief executive of the Prudential Regulation Authority, informed a committee of MPs last week that he had told Co-op Bank’s board as long ago as 2011 that it had a capital problem and might not be strong enough to take over the Lloyds TSB branches.
He said the problem had grown by the second half of 2012, and that Co-op Bank wasn’t in a position to proceed with the branch purchase. This was at a time while the Co-op had just announced and was continuing to push on with a deal it must have known was dead in the water. How that decision fits with ethical banking has not yet been explained.
Lloyds Bank officials became aware of a capital shortfall in the Co-op vaults in December 2012, four months before Co-op announced it was pulling out of the deal.
Incredibly, rather than accept responsibility for the debacle, the Co-op blamed the continued economic downturn and tougher regulatory environment imposed on banks instead.
In an ironic twist, the EU ruling which required Lloyds to slim down and divest itself of its TSB branches also came in 2009, the year the Co-op acquired Brittania.
At this time of writing, July 2013, a bullish and self-congratulatory statement from Co-op issued at the time of its original agreement with Lloyds Banking Group was still on its website.
In June 2005, the Co-operative Bank told Christian Voice to close its account at the bank because our stance on homosexuality was in conflict with the bank’s ‘ethical policies of diversity’. Gay Times awarded an ethical corporate stance award to Co-operative Bank to congratulate them.
In response to the Co-op’s decision, Christian Voice encouraged a boycott of the bank. Those who got out of the Co-op at that time will be feeling especially pleased with their decision today.
Related stories from Christian Voice:
25th July 2012: Anti-Christian Co-op grabs bank accounts
23rd June 2005: Co-op closes Christian Voice bank account
h2>Support us!
We appreciate your support; it enables our research and helps us inform your prayers.
So click below to support Christian Voice and stand up for the King of kings
Click on the social media links below to share this post:
“Co-op Bank has been left with a massive hole in its capital after acquiring toxic commercial real-estate loans ”
Many of us go hazy and switch off in bewilderment when we hear stuff like this.
Were mediaeval Christians right to leave banking to the Jews ?
[…] 11th July 2013: Co-op Bank Investors slam Regulator […]