Co-op banking on Sutherland to steer it to calmer waters
RETAILER Euan Sutherland must hit the ground running with a clear strategy for the Co-operative Group’s troubled banking division.
New chief executive Mr Sutherland was introduced to the mutual’s members at the annual meeting in Manchester on Saturday and acknowledged that there were “challenges ahead”, but also opportunities.
With plans in place to sell the general insurance division the former Kingfisher executive will have to focus on the problems facing the loss-making Co-operative Bank, which saw its credit rating downgraded to junk status by ratings agency Moody’s two weeks ago.
Leadership is a critical issue – the day after the shock Moody’s downgrade and warning over its financial health – Barry Tootell resigned as chief executive of the bank.
The Moody’s downgrade forced the Co-operative to reassure customers on its finances, with the bank saying: “We haven’t sought, nor do we need, government support.”
Although an experienced business executive Mr Sutherland is not a banker, so the first job on his ‘to-do’ list must be to find new strong leadership for the bank, and then decide on a way forward for the troubled lender.
Around 250 delegates from across the country attended the private meeting on Saturday.
Interestingly former chief executive Peter Marks, who retired at the weekend after 40 years’ service to the Co-operative was not present, having agreed with the board that it was best for the organisation to focus on the future.
According to sources who did attend the meeting Scotsman Mr Sutherland – who was on the group board before his appointment as CEO – addressed delegates for just over 15 minutes.
He highlighted “the specialness of the operation” and “the way it holds a special place in the hearts of the public” particularly in an era where established corporate structures are flawed.
He said: “Traditional capitalist models are not providing the answer to the concerns of people today. People are looking to us, the Co-operative Group, to find the alternative”.
