Richardson receives £4.6m Co-op payoff
THE former CEO of the Co-op’s banking arm, Neville Richardson, received a pay-off of £4.6m following his departure from the group last year.
The figure is contained in the banking group’s new annual report, which was filed yesterday. It shows that alongside a £1.39m compensation payment for loss of office, the banking group continued to pay Mr Richardson an additional £380,000 in salary after he stepped down from his role as CEO in July until the end of the year.
Mr Richardson also received a further £738,000 in contractually agreed pay and bonuses, and just over £2.1m by taking his pension in a lump sum on leaving the organisation.
Mr Richardson was named as CEO of the banking group following its merger with Britannia Building Society in August 2009, where he had also been chief executive.
In his introduction to the accounts, chairman Paul Flowers thanked Mr Richardson “for his leadership, both at Britannia and during the process of integration with The Co-operative Bank”.
He also said that the group needs “to continue to grow further and increase our scale and presence” in order to provide challenge the big UK clearing banks.
“The need to become a compelling co-operative alternative was a driving force behind our merger with Britannia Building Society, and is the basis for our interest in the 632 branches being sold by Lloyds Banking Group,” he said.
“We will not, however, sacrifice our members’ interests on the altar of ambition, but continue to examine cautiously the opportunity for us to enhance our reach, grow our customer base and become a truly compelling alternative for the UK consumer.”
Reports last weekend suggested that the Co-op’s board was set to meet this week to discuss the bid for Lloyds assets, which has come under significant scrutiny from the Financial Services Authority. It has been suggested that the FSA would require the entire Co-operative Group to become a regulated structure, which would require it hold billions more in capital.
In its financial statements, the bank said it “would only proceed if we could reach an agreement that was in the interests of our members and other stakeholders.”
Rival bidder NBNK revived its bid for the Lloyds assets last week, which it is being forced to sell under EU state aid rules.
During 2011, Co-operative Banking Group’s income fell by 0.5% to £817.6m, but its pre-tax profits increased by 17% to £69.8m.
A non-cash benefit of £86.3m relating to amortisation of interest charges helped to virtually wipe out a £90m provision set aside for settling mis-sold payment protection insurance (PPI) claims.
Operating profits in its retail arm – including Co-op Bank, Smile and Britannia branches – virtually doubled to £94.6m (£47.4m), but slumped in its corporate and business banking arm by 73.5% to £14.5m. The group’s net assets increased by 10% to £2.27bn.
