Newsletter 23 February 2017
As you might have read in the news, the Co-operative Bank put itself up for sale via an announcement on its website last Monday. A sale is one of a number of possible outcomes - the bank said it would also look at other ways of raising new capital. It has set up an FAQ page to answer any questions you might have as a customer.
We have made a statement on the announcement, calling on the bank to seek co-operative sources of capital and to engage with customers and the Customer Union so that, in the spirit of being a customer-led bank, we have a say in what happens next.
Our demands from any buyer follow from our two main aims - to make sure the bank sticks to its customer-led ethical policy, and ultimately to help the bank return to co-operative ownership.
Our demands for any potential deal
1. The Ethical Policy has to stay: Any new buyer must commit to keeping the bank's unique customer-led ethical policy. This includes keeping the resources in place to implement it, and continuing to report annually on the policy's implementation. Also, the policy is only meaningful if it applies to the whole of the bank's balance sheet. This means if the Co-op Bank is absorbed by another bank, the ethical policy must be taken on as well by the larger bank - unless the Co-op Bank maintains a separate balance sheet and operational independence.
2. There must be a commitment to customer ownership: As a bank which is committed in its articles of association to co-operative values, we want to see the Co-op Bank seek co-operative sources of capital. That means seeking buyers from the co-operative and mutual sector, and seeking capital from the bank's own customers. We also want to see the Co-operative Group retain its stake in the bank, unless it sells to another co-operative or mutual. If another bank or a company from outside the co-operative sector buys the bank, it must commit to meaningfully protect the bank's co-operative heritage by committing to ensure a co-operative voice in the bank's management, such as by creating a co-operatively owned shareholding.
While the sale or even the break-up of the bank is a threat to the future of ethical banking in the UK, it’s also potentially an opportunity. For us, this announcement means it is more important than ever that we stick together. If we do, with over 10,000 supporters, we could have a decisive impact on the outcome of any sale.
With best wishes,
The Save Our Bank team
PS There’s been a great deal of news and speculation (OK, mostly speculation) in the press on what the Co-op Bank’s announcement means, and what may happen next. For those interested in further reading, here are a few of the most helpful articles we have seen:
- Who could buy the Co-op Bank? Here are the runners & riders, Telegraph
- Co-op Bank is up for sale – is it time to leave?, Guardian
- Co-op Bank’s ethical culture at stake as problems come to head, FT (Facebook share)
- A chequered history for the Co-operative Bank, but what’s next for co-op banking in the UK?, Co-op News
- Co-op’s sale is the perfect chance to renew its commitment to ethical banking, blog by Lyndsey Burton for Save Our Bank
- Co-op sale signals desperate times at the Bank, Move Your Money Blog