Our Focus at 7 November

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:

Ethical Policy

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.

Ownership

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.

Comments

Has anyone approached the Mondragon co-ops in Spain?

I have been a Coop Bank customer for years and have had excellent service.

I am saddened at the present predicament, resulting from management hubris, with threat of job losses to employees for no fault of their own.

I intend to stick it out as long as I can and attempt to define and maintain an ethical stance, with the hope that more employees do not lose their jobs. I think it is worth fighting for.

a number of you may have been sent the petition being pushed by one of the increasing number of petition groups called The Sum of Us. This encourages people to sign a petition calling on the Government to nationalise the Co-op Bank! One of the drawbacks of the proliferation of mass petitions is that they are usually launched by young, enthusiastic, well-intentioned and utterly naive people, and in the case of this group, based in the USA. I told them they were being utterly misguided and if they inderstood exactly what was going on with the banks that the UK Government had bailed out during the crisis. Osbourne isn't going to take nay notice of it anyway but if it does come your way, it might be useful to not just delete it but tell them why their ideas would be counter-productive. 

Nationalise the Co-op bank?  Where does the petition demand that?

 

The govt says it wants a greater diversity in banking so it could be asked to take part ownership to help the bank back to full cooperative ownership, just as it is doing with the part-nationalised private banks.

I would rather take UK govt money than US hedge fund money.

I doubt that Government money would be offered.  This government are hardly likely to say that the Co-op bank is too big to fail.  Neither would the last government either.  It's either hedge funds or bankruptcy I should think.  Not sure which of those is the most ethical though.

I have been a Co-op Bank customer for 45 years, including the past 5 years following my move to Thailand. My particular concern is that the new majority shareholders will insist on Co-op Bank accounts being restricted to UK residents and on all accounts not meeting this criterion, including mine, being summarily closed. On the expat forum to which I subscribe, I have read stories of precisely this happening to British holders of accounts with the so-called "big" banks who live in Thailand. If the Co-op Bank were to follow suit, this would inevitably result in considerable personal inconvenience - not to mention my being subject to far less favourable exchange rates in transferring my UK-generated income to Thailand.

I realise that I am in a minority (although, hopefully, of not only 1), but I hope that my/our particular interests can still be reflected in this campaign. Are there any other non-UK resident Co-op Bank account holders out there, by the way? 

Yes, I am also a permanent resident of foreign climes. I need my Co-op bank account because I still have some bills that need regular payment in the UK. I'm certainly not giving my money to any of the mainstream banks to be invested in arms, nuclear power or other fossil fuels. There are legit ethical reasons for allowing expats to keep their UK bank accounts.

I am a bit puzzled, though, as to what the hedge funds would gain by restricting their customer base in this way.

If all account holders could offer unified commitment to remove their account if a sound solution in ethical non-privatised manner is not negotiated, could this bring adequate pressure??!! Only problem ?impossible logistics.

SaveOurBank.coop has set out from the start to get as many account holders as possible acting together. That's why we say "don't switch yet". If there are not adequate responses on ethics and the future structure and governance then the implication is that supporters will lose patience and switch.

See below - Occupy advise us Co-op customers to withdraw money from deposit accounts. My understanding is that the terms of my fixed rate deposit account do not permit withdrawals. Is it advantageous to the goal of saving the bank to withdraw from a savings account? The question is then where to put that money - I only have a small amount but shudder at the thought of opening an account with anyone else to keep that money in. What do you think?

"We need to beat hedge fund vultures at their own game and buy their pot of Co-op debt for a fraction of its £940 million face value.  The price will be reduced as fast as Co-op deposit account-holders withdraw their money whilst leaving their accounts open."