Co-op turns away £1bn on principle

THE Co-operative Bank has turned away business worth £1bn since taking an ethical stance in 1992.

The Manchester-based bank said this position had not undermined its lending rates, instead it helped underpin a strong business performance.

Business lending has increased on the back of the Co-op’s reputation as a well-funded bank with no dependency on wholesale markets.

Director of corporate banking Keith Alderson said it had grown its corporate banking business in the past year with lending up 20% to businesses with a turnover of £1m to £50m.

“Our capital position remains solid and well-managed. We’re in good shape,” said Mr Alderson.

Since 1992 total commercial lending has grown from £571m in 1992 to £4.4bn, an average of 14% a year. Customer lending grew 15% last year and like-for-like bad debt charges fell.

The bank registered a 40% increase in personal savings, topping £4bn for the first time, and a 65% increase in new current accounts.

The Co-operative said it had turned away business worth £169m from the fossil fuel extraction and production industries and £118m from cosmetics manufacturers that test on animals. A further £112m of potential business was associated with oppressive regimes.

Mr Alderson said: “Never has it been more important that responsible lending is prudent lending and I’m pleased to say that the Co-operative Bank’s ethical policy has stood us in good stead for more than 15 years now.

“The bank’s ethical policy has led to more than £1bn in unethical business being declined, but it has also contributed to a massive £3.8bn net growth in our corporate lending”

The bank said it would continue to support social and environmental organisations and had carried out its fifth ethical consultation to help hone the policy.

After receiving responses from 80,000 customers the bank said it would now decline business in connection with: biofuels that have a particularly high global warming potential, organisations that advocate discrimination and incitement to hatred and any exploitation of the great apes.