Co-operative Bank puts itself up for sale

The Co-Operative Bank invited offers to buy all of it shares as it continues to complete the turnaround from 2013's near-collapse.

The bank, which is 20% owned by the Co-Operative Group, said that on Monday that it was making progress with a turnaround plan, as its aims to build up capital to meet regulatory requirements.

The Co-Op bank, which has over 4m customers, was bailed out in 2013 by a group of hedge funds and has cut costs by a about a fifth since 2014.

It said that due to low interest rates it has been difficult to increase its capital sufficiently.

"As a result, and having concluded its annual planning review, the board is today commencing a sale process, inviting offers for all of the issued ordinary share capital in the bank”

The board said a sale process was "something always considered a potential outcome of the turnaround plan", alongside considering other options to build capital and meet the longer term capital requirements applicable to all UK banks.

Chief executive Liam Coleman added that the bank had reduced its cost base by over 20 per cent since 2014, sold over half of the original non-core portfolio, and made critical IT improvements, as well as improving its risk management and operational resilience.

"The Co-operative Bank delivers an attractive banking proposition that is differentiated by our values and ethics and is highly valued by our 4m customers. Customers value the Co-operative Bank and our ethical brand is a point of difference that sets us apart in the market," he said.

A spokesperson for the Bank of England's Prudential Regulation Authority welcomed the announced actions and and said it will "continue to assess the bank’s progress in building greater financial resilience over the coming months".

Separately, the Co-Op has also resolved a contractual difference with Capita over a mortgage administration deal, which will save 740 Capita jobs.