Login Register

Deal struck for rescue of bank

By MIG: Leek Post and Times  |  Posted: November 02, 2013

One half of the former Britannia Building Society headquarters in Leek.

Comments (0)

THE future of jobs and the two former Britannia Building Society sites in Leek has come under more scrutiny after owner the Co-operative Bank struck a deal with hedge firms to take over 70 per cent of the company.

The Co-op still retains the largest stakeholder in the arrangement, with 30 per cent.

The moves comes after the bank announced in June a loss for the year of £781 million, and admitted that there were deep-rooted problems.

The Co-op had previously stated that bad loans had related mostly to the former Britannia Building Society.

Related content

The capital shortfall came to light during the bank’s attempt to buy more than 600 bank branches from the partially state-owned Lloyds Banking Group.

A deal was initially agreed in 2012, but fell through earlier this year.

Euan Sutherland, Co-op group chief executive, said: “There has been a lot of speculation, but I am pleased to announce that we have reached an agreement in principle that will save the Co-operative Bank “This is a result of months of hard work and intensive negotiations with stakeholders and investors. We have listened to key players.

“We have not turned to taxpayers to bail out the bank. We are the first bank to be rescued and survive as a standalone entity without taxpayers’ money.

“The Co-op retains 30 per cent and is the largest shareholder.

“The most important is to build fair, attractive proposals for small investors and hard working families across Britain who have invested in the Cooperative Bank. I am confident we have done this.

“This will remain the Co-operative Bank.

“We have embedded the Co-op principle in the constitution of the bank to guarantee this .

“This has been a hugely difficult time for members and small investors and colleagues, who I thank for their support along the way.” Staffordshire Moorlands MP Karen Bradley said she has had a positive conversation with the Co-operative and had also agreed to meet the chief executive this week for more information.

Mrs Bradley has also written to Sajid Javid MP, Financial Secretary to the Treasury.

In her letter Mrs Bradley said: “Since the scale of the financial problems at the heart of the Co-operative have come to light, I have met with the Coop management on several occasions to ask them about their dedication to Leek. As recently as mid-August, I was assured that they value the skills and expertise from the workforce in the Moorlands and are committed to maintaining a presence there.

“I am due to hold another meeting with them to discuss the latest developments “I understand that you are unable to share any details about the negotiations at this stage, but if possible I would like to meet with you to express my concerns and urge you to consider the jobs of those working in Leek in any future decision-making.

“Any support that you can offer will be most welcome.” Leader of Staffordshire Moorlands District Council, Sybil Ralphs, said: “I am very concerned for the future of the two Leek sites.

“I met senior management before the latest announcement and was reassured that the bank would always maintain a presence in Leek.”

Read more from Leek Post & Times

Do you have something to say? Leave your comment here...

max 4000 characters