Co-op shareholding, Bank reaction on account closures, next CEO named
In this month’s newsletter:
We have a lot to report this month – here are the headlines, with more detail on each item below.
- The Co-op Group confirms it will take a place on the bank’s board, in response to Save Our Bank question at AGM
- Closure of Cuba Solidarity Campaign’s account becomes a minor diplomatic incident, while Nicaragua town-twinning organisation accounts attract scrutiny
- Co-op Bank offers signs of a change of approach on account closures at meeting with Save Our Bank
- Probable next Co-op Bank CEO named, but no details on his pay packet
Co-op Group confirms it will take a place on the bank’s board, in response to Save Our Bank question at AGM
At the Co-op Group’s AGM in Manchester on Saturday 21st May, Save Our Bank’s Shaun Fensom stood up and asked the chairperson, Alan Leighton, whether the Group – which owns Co-op food shops and is a 20% shareholder in the Co-op Bank - can commit to take an active role in the bank’s future, play an active part on its board, and join with bank customers who are organising to make sure the bank sticks to its ethical principles. Or, asked Fensom, is the real plan for the Group to sell its stake when the price is right?
It was a straight question with a refreshingly straight answer: Leighton responded that the group would appoint somebody to the board of the bank soon, and that person has appointed with a focus on protecting the group’s ethics and brand. “The price [of the shares] is irrelevant.”
Although the Co-op Bank is now 80% owned by private investors, the Co-operative Group remains its largest shareholder. We’ve been concerned that the Group had not taken up the right to appoint someone to the board. We’re pleased they will be doing so soon, have taken ethics and co-operative values into consideration in their appointment, and appear committed to the bank for the long term.
You can watch the question and the answer here or find it in the “Q&A - Annual Report” film on the Group’s AGM page.
Closure of Cuba Solidarity Campaign’s account becomes a minor diplomatic incident, while Nicaragua town-twinning organisation accounts attract scrutiny
The Co-op Bank’s ill-judged closure of the accounts of several human rights organisations continues to have repercussions, at an increasingly high level. Cuba’s permanent mission to the UN is the latest to get involved, describing the closure of the Cuba Solidarity Campaign account as extraterritorial application of US sanctions, and potentially illegal, according to Co-operative News and the CSC. The account closures have also been raised in the Scottish, UK and Irish Parliaments, and the bank even appeared on the front page of the Granma, the official newspaper of the Cuban Communist Party.
The Nicaragua Solidarity Campaign, whose Welsh branch has also had its account closed, reports that “the past month the Co-op Bank has begun targeting UK towns that have twinning links with towns and communities in Nicaragua.” Four such groups have been told by the bank to complete 21-page forms giving extensive details of all their activities. Arduous as this is, it is a step forward from simply closing accounts without explanation. One group, the Sheffield – Esteli Society, says it has been informed its account will be closed. If that is the case, it’s a worrying departure from the freeze in account closures that the bank promised.
The Nicaragua Solidarity Campaign also points out that Nicaragua has been removed from ‘high risk’ country lists (and we at Save Our Bank can’t imagine that twin-town organisations such as these are a hotbed of illicit activity). We raised this in a meeting with the bank (see below). Find out more about how you can support Nicaragua Solidarity Campaign on account closures here.
Co-op Bank offers signs of a change of approach on account closures at meeting with Save Our Bank
We raised these developments on NGO account closures and a range of other points in a meeting with the bank on 9th May. They say they have reviewed their approach and 'have now introduced a cross-bank committee to review the policies, procedures and decisions around potential closures'. We understand this committee includes staff from the bank's Values & Ethics team. The bank also say that 'extended due diligence is being requested as part of account reviews'. Save Our Bank has made clear in the past that if indeed due diligence is necessary, then it should be performed rather than just closing accounts.
So there are signs the bank is acting on our concerns, but we also need to know more about the reports of at least one new account closure.
After Amnesty International UK committed to take the issue up with the bank after a resolution at their AGM (see our last newsletter), we’ve been in discussions with Amnesty and other concerned groups to coordinate our response to the bank.
At our meeting with the bank we discussed a range of other issues that our members have raised with us, including the bank’s work to support credit unions, and the bank’s Everyday Rewards benefits not being made available to Smile customers. The bank committed to send us its position on these items, and when we receive these updates we’ll put a report of the meeting on our website – feel free to get in touch if you would like more detail in the meantime.
Probable next Co-op Bank CEO named, but no details on his pay packet
We have taken issue with the Co-op Bank’s CEO, Niall Booker, paying himself some £4 million - despite the bank having an ethical policy commitment to make sure executive pay is “fair and responsible”.
The bank has just appointed Liam Coleman deputy chief executive, in the expectation that he will be the next CEO after Niall Booker’s contract ends at the end of this year. Coleman has been with the bank since mid-2013. He was previously at RBS and before that at Nationwide Building Society (so some experience with a mutual). We hope his idea of “fair and responsible” is a little more grounded in reality.
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