Troubled Co-op Bank halts business lending
THE Co-operative Bank has stopped offering loans to new business customers as it seeks to shore up its finances.
The move will raise fresh concerns over the state of its balance sheet weeks after the bank ruled out a bailout from the government.
A spokesman for Manchester-based bank stressed that the move did not affect its retail operation.
In a statement the group’s new chief executive Euan Sutherland, who took up his position this month, said: “This decision is part of our commercial strategy to play to the traditional strengths of the bank.
“It will enable us to focus our energies and capital on both supporting our existing corporate customers and on growing our presence in the retail banking market.”
Credit ratings agency Moody’s downgraded the bank’s debt rating to junk earlier in the month and raised concerns over possible future losses on commercial property loans, most of which were from the Britannia Building Society which it acquired in 2009.
In March it said it would sell its general insurance arm to bolster its finances and it has agreed to sell its life insurance business to Royal London Mutual Insurance for £220m.
Last month the Co-op also pulled out of its planned deal to buy 630 bank branches from Lloyds.