Co-op Bank poaches Dench from Paragon to carry on turnaround

Bob Dench, the chairman of Paragon Banking Group, will be stepping down from the board after 14 years at the company to take up a new position as chairman of the Co-operative Bank.

Co-operative Bank, which last June agreed a restructuring and £633m recapitalisation plan last June with its US hedge fund creditors, said retiring chairman Dennis Holt will be replaced by Dench on 14 March.

The bank's backers, including Blue Mountain Capital Management, Cyrus Capital Partners, GoldenTree Asset Management and Silver Point, last year wrote off £443m in debt as well as running a £250m fund-raising.

Ahead of his departure, Holt said Co-op Bank has battled through challenging times in the past four years but "has worked hard to fix the legacy issues that led to the crisis it faced in late 2013", when former chairman Paul Flowers was ousted. "It now has solid foundations and a clear pathway to sustainable profitability and robust capital resilience."

Liam Coleman, chief executive of Co-op Bank, said the bank still has "much to do".

Former Barclays and Axa man Dench, has led Paragon since 2004, guiding it through the financial crisis and overseeing its application for a banking licence.

Paragon said it has "well developed" succession plans and a search for his replacement, both internally and externally, was already underway. Dench will stay on as chairman of Paragon until his successor has been appointed.

He said: "It has been a great joy and a privilege to have been at Paragon for the last 14 years, 11 of which have been as chairman. The transitioning of the business into a banking group last year was a major milestone. It came after many years of real focus and hard work by a very talented group of individuals, all of whom recognise the importance of working as a team."

At 1300 GMT, the shares were down 0.9% to 491.20p.