Statement from the Save Our Bank campaign following the announcements of the Co-operative Group’s Recapitalisation Plan on Monday 4th November
The Co-operative Group confirmed on Monday that, as we had feared, the Recapitalisation Plan would leave just 30% of the bank in Co-operative ownership and the remainder in private investor hands. There was also bad news for staff with the announcement that there would likely be significant job losses and some branch closures.
We were however encouraged by some elements. In particular, the commitment to undertake a further Ethical Policy review early next year, and the suggestion by chief executive Euan Sutherland that the Co-operative Group might increase its shareholding in the future, giving some hope to those that would like to see it take back control of the bank.
We are reassured that – for the moment – we are right to urge customers to sit tight, join us and not to leave the bank. We remain confident that we can have a real influence on the outcome if we stick together.
Support and encouragement for the campaign has been overwhelming. We have received many hundreds of comments from campaign supporters. These have informed our priorities for the next steps.
Our focus for now is on two areas:
We are still missing the cast-iron commitment that the Bank's Ethical Policy will be set in stone, not some ambiguous 'ethical code'. It is the Ethical Policy which sets out clearly and uniquely how monies will and will not be invested. Last week fourteen major charities and campaign groups joined Save our Bank in agreement on this point, and we expect more to join us in the coming days. We need to see the following set in stone in the Co-operative Bank’s new Articles of Association (constitution):
- Bank Ethical Policy and the commitment to shun all activities that are in breach of this Policy
- Regular customer consultation on the Bank Ethical Policy to ensure that it is up to date and reflective of customers’ concerns
- Appropriate resourcing of the implementation of the Ethical Policy to ensure all new business activity can be screened, and existing business activity is subject to regular review
- Annual, independent third-party auditing of the implementation process of the Ethical Policy by well trusted experts / organisations (internal audit and Big Four accounting practices would not qualify)
- Detailed, independently-verified annual reporting on the impact of the implementation of the Ethical Policy, including a list of all business declined as a result.
The Co-operative Bank’s ethics extend further than its Ethical Policy - for example, its track record of world-class sustainability reporting. But for now, Save our Bank is focusing on securing continuance of the Ethical Policy as this is the single most important driver of its ethical leadership.
The large majority of our supporters do not want the bank under the control of private investors and hedge funds. We doubt that a truly ethical bank can have hedge funds as its owners in the long term. Neither is it likely that the funds will want to stay for the long term: it is not normally what they do.
We believe a coalition of interests can be built that will bring the bank back under majority co-operative ownership and control in some form, so that again it can fairly claim the name. Aside from the possibility that the Co-operative Group might increase its stake, we have had many suggestions as to how this might work including a 'supporters trust' type fund for customers, buy-ins from other financial mutuals or trading co-operatives, or even support from overseas mutuals. We think these are all worthy of consideration. Perhaps they all have a part to play.
This is of course very complex and will take time. We plan to consult widely in this and to bring Save Our Bank supporters along with us as this part unfolds.
We call on all concerned customers: don’t switch yet, sign up to the campaign. The battle is not lost.