Co-op to launch inquiry into banking woes
THE Co-operative Group has confirmed that is planning to commission an independent review into the problems in its banking business which caused an emergency £1.5bn fundraising.
It is expected that a senior business leader or City lawyer will be asked to front the inquiry, which will be asked to report back by early next year.
A statement from the Manchester-based mutual, which has had a torrid few months, said: “The Co-operative Group and Bank can confirm that an independent inquiry will be set up to examine the events that led to the capital action plan announcement of June 17 2013. Further details will be announced in due course.”
New group chief executive Euan Sutherland has led the bank’s restructuring, bringing in a new, experienced team to run it, as well as brokering a deal to shore-up the bank’s balance sheet.
This includes the Co-operative Group pumping £1bn into the bank, while shares in the bank will be listed on the Stock Market too.
The probe is expected to look at the acquisition of Britannia Building Society in 2009, which had lend significant sums to customer for commercial property deals and ultimately left the Co-operative nursing heavy losses.
It will also examine whether the forthright former chief executive, Peter Marks, was right to pursue the acquisition of 630 branches from Lloyds Banking Group. The Co-op was forced to abandon prolonged talks with Lloyds this year after it emerged its banking arm was facing the capital shortfall.
The strategy of pursuing the deal with Lloyds Bank for 630 branches it was ordered to sell is also expected to be a focus of the probe. The Co-op ultimately was forced to walk away from the deal.