News
15% of Co-op’s 324 branches to shut
40+ Co-op Bank branches are to close and around 1,000 staff will lose their jobs under the terms of a rescue deal.
The deal hammered out with creditors over the weekend has secured the Bank’s future, but cedes 70% of the ownership to around six hedge funds, leaving 30% in the Co-op’s control.
The bank’s rescue was necessitated by the discovery of a £1.5bn hole in its balance sheet caused by bad loans, commercial and sub-prime mortgages which Co-op inherited when it ‘merged’ with Britannia Building Society in 2009.
Critics have expressed fears that a majority hedge-fund ownership may not adhere to the ethical guiding principles with which Co-op has long been associated.
Co-operative Group is writing a pledge that the bank will “only to do what it sees as ethical business into the bank’s principles or articles of association” in order to protect its co-operative culture.
Co-op has taken out adverts in national newspapers to reassure customers the hedge funds will not turn it into ‘just another bank’.