Four years after almost collapsing and being bailed out by US hedge funds, the Co-operative Bank has put itself up for sale.
Dennis Holt, the bank’s chairman stated: ‘Since we began work on the Bank’s turnaround, the board has always been clear that we would need to build capital for the future.
‘We are now commencing a sale process, alongside other options. The Bank’s ethical heritage and customer proposition will be a central consideration in this.’
The bank was merged with Britannia building society in 2009 but the deal was later held responsible for its near collapse in 2013.
A rescue took place after the Co-operative Bank revealed a £1.5 billion black hole in its accounts and in the same year, chairman Paul Flowers stepped down over expenses concerns. The following year Mr Flowers pled guilty to drugs possession charges.
Low interest rates, repeated hits by penalties for mis-selling of PPI, and negative press have inhibited the bank from strengthening its finances.
Autumn 2015 saw the bank admit it would remain loss-making until the end of 2017 but executives continue to assure customers that it is making progress in delivering its turnaround plan.
Heavy speculation has surrounded the bank and its long-term future but the Prudential Regulation Authority (PRA) has welcomed their decision to sell.
The PRA states: “We will continue to assess the bank’s progress in building greater financial resilience over the coming months.”
Formed out of the Lloyds/HBOS merger, TSB Bank plc has a very strong capital position with a clear reputation and rumours suggest they may buy ‘if the price is right’.
There is dispute as to whether TSB would inherit the Co-op’s problems but both are similar brands and analysts suggest that the purchase could be a real success.