09 May 14 from www.saveourbank.coop

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:

“The Co-operative Group notes today’s announcement from The Co-operative Bank in relation to its £400m capital raising and confirms its participation. While the size of the Group’s shareholding will be reduced following the capital raising, we will retain a significant stake and expect to remain the single largest shareholder. The Group remains supportive of the Bank and its strategy.”

 

 

09 May 14

Bank claims it is on course to raise £400m more - but Co-op Group share will fall

The Co-operative Bank has announced today (9 May) that it will raise £400m through an issue of new shares. It says it is confident of reaching its target given commitments from its 5 largest shareholders, including The Co-operative Group.

05 May 14 from www.telegraph.co.uk

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%. Assuming it does not join in the new issue the Group's share will drop to just over 20% says the Guardian - "the minimum for it to have any effective control over the bank".

Save Our Bank is calling on the bank to give customers a chance to buy stock.

30 April 14 from www.co-operativebank.co.uk

In response to the launch of the Kelly Review today, The Co-operative Bank released a video response from its CEO, Nial Booker, on its website. The statement affirmed the bank's commitment to values and ethics, and referenced the forthcoming ethical policy review "in the next few months". 

We know our customers joined the Bank for its ethics and values, and saw those as a distinguishing features. Despite the issues we've had we are focused on refreshing our values and ethics, and we intend to talk to you, our customers, in the next few months with our proposals for doing just that.

30 April 14 from www.thekellyreview.co.uk

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."

 

28 April 14 from www.wealthbriefing.com

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:

"David Bagley, who for a decade was the front-man for HSBC's global compliance effort, has resurfaced as a compliance consultant for the troubled Co-Op Bank in the UK. A spokesman told Compliance Matters: "My understanding is that he's currently on a contract with the Co-Op. I would expect that he's working on AML."

11 April 14

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.”

The Co-operative Bank today apologised to customers for its past failings as it announced losses of £1.3 billion. At the same time it announced a pay package for its Chief Executive, Niall Booker, of £1.2 million, alongside a potential bonus of £1.7 million to be paid provided the bank's financial position improves. The bank also announced it would withhold payments of £5 million to former executives.

10 April 14 from www.theguardian.com

Reports in the media say that Lord Myners has resigned from the Co-operative Group board, apparently because of opposition to his proposed reforms of the governance of the Group. However, in a statement today The Group says he will remain on the board until the forthcoming AGM but will not seek re-election.

Lord Myners' proposed reforms would affect how the Group is governed but not the bank. The Group is currently the largest shareholder in the bank with 30%. The bank board was extensively restructured at the time of the recapitalisation in December 2013 and is already run along plc lines.

 

04 April 14

The bank needs another £400m capital

Last week the Co-op Bank announced that unforeseen losses will mean it needs to raise another £400 million in capital on top of the £1.5 billion it raised in the recapitalisation last year.

Raising £1.5 billion meant handing 70% of the bank to private owners, leaving just 30% with former owners The Co-operative Group. There is a danger that if private shareholders pump extra cash in now, the Group won’t have cash to match, and its shareholding will be “diluted” below 30%.

24 March 14

In reaction to news that the Co-op Bank needs a further capital injection of £400m, The Save Our Bank campaign made the following statement:

"It's troubling to hear that The Co-operative Bank needs a further capital injection, and we hope that this will not lead to a dilution in The Co-operative Group's 30% shareholding. Indeed we would like to see the bank prioritise raising capital from ordinary customers, members and long-term investors such as pension funds, rather than relying on short-termist organisations like hedge funds. 

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