Today the Co-operative Bank announced that it is no longer "for sale", but remains in "advanced discussions" with a group of current private equity and hedge fund investors to recapitalise the bank.
We're pleased to see that the bank has confirmed that proposal from these investors will, if adopted, safeguard the Bank’s values and ethics. However we're concerned by reports (unconfirmed so far) that The Co-operative Group's share in the bank will be substantially reduced by the deal, perhaps to less than five percent. Such a large reduction in the Co-op Group's stake in the bank would mean the Group loses important rights, e.g. to appoint a director and veto certain changes to the bank's constitution. We would like to see more detail from the bank on how customer ownership will be protected and developed under the deal, and how the bank's commitment to co-operative values, set out in its 2014 constitution, will be maintained.
We set out our demands for any potential deal at the start of this process, and recently held a helpful and constructive meeting with the bank's Chair and Chief Executive. We will now seek further discussions with the bank and its investors on how this proposed deal will measure up as soon as details are finalised.
As a democratic co-operative itself, the Customer Union behind Save Our Bank, will then seek the views of its members as to whether or not to support the deal.
A full copy of the bank's statement is available here.