Recent Events in Co-operative Banking Group
NACO notes with interest Monday’s announcement about the finances of the Co-operative Bank. The plan outlined by both Euan Sutherland and Niall Booker, is clearly intended to stabilise our financial position, and to address the capital shortfall.
NACO continues to be very concerned at recent financial developments, but we are reassured that the Co-operative Group has signalled very clear support for the Bank. The plan announced on Monday, whereby the Bank’s investment bondholders will exchange their bonds for equity in the business, would appear to be a ‘Bail in’ rather than a ‘Bail out’, and no tax payer money is involved.
The Bank has been a ‘plc’ for some years, and previously its shares were wholly owned by the Co-operative Group. These bondholders will now have a minority shareholding in the Bank, but Co-operative Group will continue to hold 75% of the shares. We do not yet know what impact this may have on the direct running of the Bank, or on the internal democracy of the Co-operative Movement but we will be keeping a close eye on developments.
We know that members are very anxious about the future of the business, and we share their concern. Obviously there is going to be a significant impact on staffing levels. NACO will be seeking to vigorously protect as many jobs as possible, as well as our contractual severance terms.
We will keep you informed of any developments. In the meantime, if you have any questions please contact the NACO National Office.