The Co-operative Bank has appointed Laura Carstensen, a commissioner at the Equality and Human Rights Commission, as the new chair of its values and ethics committee. Laura Carstensen was previously a partner at lawyers Slaughter and May and is a former deputy chairman of the UK Competition Commission.
The bank is saying it has met its capital raising target sooner than expected with commitments from shareholders totalling £400m. This includes the Co-operative Group who, as expected, will be diluted to 20% but will remain the largest single shareholder.
In the news release, chief exec Niall Booker is quoted:
Ed Mayo, general secretary of Co-operatives UK (the UK federation of co-operatives) has indicated that the bank could retain the "Co-operative" name despite the fall in the mutual share to just 20% - providing "the values demonstrate the co-operative worth of the bank going forward". The statement draws attention to the fact that other organisations are in a similar situation.
The bank today issued a press release detailing its plan to raise £400m additional capital.
It says it is confident it will raise the money, and that it has commitment from 5 largest shareholders, including The Co-operative Group, to subscribe to new shares.
The Co-operative Group responded:
Bank claims it is on course to raise £400m more - but Co-op Group share will fall
A report in the Telegraph suggests that the Co-operative Group will sell some of its entitlement to the planned rights issue by the bank. The rights issue is designed to raise £400m and there has been doubt that the Group - which has serious financial difficulties - would be able to find £100m+ needed to keep its stake at 30%.
The Kelly review into what went wrong at the bank was published today.
In its response the Co-op Group welcomed the report. Richard Pennycook said: "the management that instigated this disaster for the Group are no longer in place; the flawed governance structure that failed to apply the right checks and balances, however, remains."
News has emerged that the Co-operative Bank has hired David Bagley, last seen when he resigned as HSBC's head of compliance after admitting that HSBC had allowed Mexican drug cartels to launder billions of dollars through its US operation for years. The website Complaince Matters reports:
The Save Our Bank campaign is calling on the Co-op Bank's Chief Executive not to accept the £1.7m bonus he has been promised if the bank's position improves. “The bank needs to take a lead and show that it is different from other banks,” said Shaun Fensom from the Save Our Bank campaign. “It can start by rejecting excessive pay deals.”