Julian Knight: It's full stop at the Co-op as banking plans come apart
And now the 'super-mutual' faces struggle to survive as a mutual at all after downgrading
Personal Finance Editor
Saturday 11 May 2013
Make no bones about it, the down- grading of the Co-op Bank by credit agency Moody's and sudden departure of its chief executive Barry Tootell is serious.
The "super-mutual", as it has been dubbed, is about to enter one of the most difficult periods in its long and distinguished history.
Clearly the departure of the chief executive is a damning indictment of his business strategy, which was to take advantage of the Co-op brand and the weakness of the building society sector and grow the group into a rival to the other mutual behemoth Nationwide.
But the warning from Moody's that the Co-op Bank may need more capital shows that Icarus-like Tootell and his team have tried to soar too high. I don't know the ins and outs of the Co-op's balance sheet but the fact that it is Moody's that has downgraded brings me up short, as out of all the credit agencies they have the reputation of being very cautious.
The problem for the Co-op though seems pretty clear - the swallowing of the Britannia building society and its loan book seems more difficult than first thought.
The economy is of course sluggish – but this hasn't stopped some banks doing very nicely thank you – and amongst Co-op customers, who tend to be slightly lower- income than the likes of say HSBC, there is a seemingly steady and interminable financial squeeze on.
For a long time in the UK, savers have been subsidising borrowers – to the tune of £100bn-plus since the financial crisis broke – but those with debts have still been unable to pay down their borrowings.
They are hanging around necks and I believe that this applies disproportionately to Co-op customers, hence Moody's warning on the balance sheet.
So if you are a Co-op Bank customer should you be worried?
Well firstly your money is safe, as deposits are protected to the tune of the first £85,000. In fact protection has been improved since the run on Northern Rock in 2007. So there is no need to turn up at your branch with savings book in hand.
However, longer term the Co-op will have to change course and perhaps even change ownership. In recent weeks the financial squeeze has led to it pulling out of buying 600-plus branches of Lloyds TSB.
It is safe to say that at the very least the bid to become one of Britain's major banking players is at an end for the Co-op.
The question isn't whether it can live up to its "super-mutual" status, rather whether it can remain a mutual at all. I said it was serious.
A bonzer idea from Brussels
I was very interested to see Sheila's Wheels post some bonzer numbers this week. It seems the death of female-focused insurers at the hands of the EU gender directive was well and truly exaggerated.
The self-proclaimed "pinkest, most sequined" brand on the block has 95 per cent female drivers, despite no insurer being allowed to offer discounts to drivers on the grounds of gender alone any more.
In what is clearly a victory of brand over reality, though, Sheila's is celebrating because in the main female drivers have fewer and less costly accidents than men.
As a result, Sheila's has the freedom to charge more than it used to – due to not being allowed to offer a discount for gender – for exactly the same service and extra profitability is entirely imposed on them because of the EU rule.
For Sheila's Wheels and other female-focused insurers the EU bureaucrats may have proved a bit of a boon for once.
Keep on cracking down
Police have raided premises in London and broken up a suspected pension unlocking or "liberation" scam, cold calling pension holders with fraudulent offers that could lead to them being fleeced.
This underground industry, believed to be worth £400m a year, puts the pension cash in very high-risk or non-existent investments, leaving victims destitute.
It's thoroughly unpleasant and it's good to see a firm line being taken. Let's hope it is the shape of things to come.
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
Interest-only mortgages return to give more flexibility to borrowers
Bargain Hunter: Exclusive discount on a SmartGlider - a self-balancing electric scooter
My Tinder date asked for a refund when I declined a second meet up
10 tips for taking out a personal loan
Bank-beating exchange rates on your international payments
- 1 President Obama leaves touching comment on Humans of New York photo from Iran
- 2 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
- 3 The Chinese city where men have 'three girlfriends because there are so many women'
- 4 'Heartbreaking' Syria orphan photo wasn't taken in Syria and not of orphan
- 5 German police forced to ask public to stop bringing donations for refugees arriving by train
Britain to take more refugees as Cameron bows to pressure after more than 250,000 back our campaign
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Make your voice heard: Sign The Independent's petition to welcome refugees
iJobs Money & Business
£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
Day In a Page
This five-bedroom home in Sutton Coldfield is arranged over three floors, with a detached garage to the rear and a driveway at the front of the property.
In an elevated position above the bay, this four-bedroom home offers sea and headland views. There is a decked balcony and sun terrace - plus coastal walks on the doorstep.
With four bedrooms, this spacious maisonette in a mid-terrace period-style house in Holland Road is well-maintained and offers high ceilings and period features.
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.