Co-op Bank lined with further asset sales
THE Co-operative Bank looks set for another major asset sale as part of its plan to strengthen its finances.
According to reports over the weekend, the Manchester-based lender has approached a number of investment funds about a sale of billions of pounds of British mortgages.
Sky News said that advisers to the Co-op Bank have held talks with funds including Apollo Management, Blackstone and CarVal about potential deals for parcels of the £6.6bn Optimum portfolio.
The broadcaster said talks with prospective investors are ongoing and are likely to result in a series of transactions involving different structures for the assets, which the banking regulator has ordered the Co-op Bank to sell.
A number of other unidentified parties have also held talks with the Co-op Bank about buying parts of Optimum, which the lender adoped after its merger with the Britannia Building Society in 2009. The Optimum assets were partly responsible for the Co-op Bank being the only one of eight big lenders to fail stress tests set by the Bank of England in December.
News of the talks over the Optimum assets comes days before the bank releases its annual results for 2014.
The Co-op Bank was plunged into financial chaos even as it attempted to pursue a takeover of 632 Lloyds Banking Group branches. It was then part of the Manchester-based Co-operative Group, but it is now controlled by US hedge funds after the mutual was unable to shore-up the bank’s balance sheet on its own, and now has just a minority stake of around 25%.
A spokesman for the Co-op Bank declined to comment.
