Co-operative Bank struggles continue

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Re: Co-operative Bank struggles continue

Postby planteria » Mon Feb 06, 2017 9:33 am

not sure if you mean oversight by regulators, or from the Co-op itself? pathetic mismanagement by the latter.
i wouldn't worry re. funds, as the FSCS is there as a safety net, but their CS is desperately poor ime.
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Re: Co-operative Bank struggles continue

Postby macliam » Mon Feb 06, 2017 11:10 am

planteria wrote:not sure if you mean oversight by regulators, or from the Co-op itself? pathetic mismanagement by the latter.
i wouldn't worry re. funds, as the FSCS is there as a safety net, but their CS is desperately poor ime.

I meant lack of oversight by the Coop - they let the Bank's chairman run with it, presumably impressed that he was a methodist minister too......

We all know what happened and Coop learned a very hard lesson - but the hole was very, very deep and not easily got out of - especially when there are plenty of sharks who could profit from the bank's demise. It's also an eye-opener regarding how "wonderful" senior executives are and how they deserve being treated like princes...... :roll:

My worry is not so much the financials - it will stand or fall and my account is well below the FSCS limit - but the service (which has not improved) and impact on the bank's ethical values as so much of it is now owned outside the Coop structure.
Just because I'm paranoid, it doesn't mean they're not out to get me
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Re: Co-operative Bank struggles continue

Postby Pandora » Mon Feb 06, 2017 1:03 pm

pabenny wrote:
blythburgh wrote:... the story should not have been run in the way it was.


This kind of true but misleading story is only but a step away from lying or reporting lies as if they were true.


I don't think you quite get it.

In 2009 the Co-Op bank took over Britannia. In 2012 the Co-Op bank wanted to buy a chunk of Lloyds Bank. In the 2013 they withdrew from that deal, shortly after reporting a loss of £600m, and it turned out that they needed an extra £1.5bn worth of capital. They blamed it all on the Britannia deal. The Co-Op bank only survived because of a deal with a bunch of hedge funds that ended up owning 80% of the bank. That bloke Niall Booker was busy trying to turn things round.

The problem is that the Co-Op bank has consistently been losing money ever since. It lost more money in 2015 than it did in 2014.Its latest results for the half year to June 2016 showed a loss of £177m, and that was after making a £58m profit on flogging their share of Visa Europe. It is expected to make a loss on 2017. As a result its capital is shrinking.

As the statement goes.

“The Bank is updating its previous guidance and now expects its CET1 ratio will fall and remain below 10% over the medium term and that it is unlikely to meet its individual capital guidance over the planning period to 2020. The Bank continues to expect to meet its Pillar 1 capital requirements and to maintain sufficient liquidity to meet its obligations”

http://www.co-operativebank.co.uk/asset ... ce-RNS.pdf

If this carries on, eventually the PRA might have to do something. Or maybe given another couple of years it will sort itself out, and those hedge funds will be able to sell to some Spanish bank. But there is a real risk that might not happen.
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Re: Co-operative Bank struggles continue

Postby pabenny » Mon Feb 06, 2017 2:18 pm

Pandora - thank you for the additional background.

The point about the £1.5bn is that it was recognised in 2013 and as such is not new news. Clearly the deepening losses in subsequent years are concerning, and will continue to erode the capital base. It's worth understanding - if they explain it - how much is further provisioning against historic lending (pre-rescue), and how much relates to more recent activity.

To be clear - I'm not disputing that the Coop bank is in trouble. But I do criticise the media reference to a historic problem without making it clear that it is old news
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Re: Co-operative Bank struggles continue

Postby planteria » Mon Feb 13, 2017 8:47 am

the 'For Sale' signs are up now.. http://www.bbc.co.uk/news/business-38954115
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Re: Co-operative Bank struggles continue

Postby planteria » Tue Feb 14, 2017 7:54 am

the topic of Thought For The Day this morning :)
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