James Moore: Co-op banks on the new man at the top
Outlook The Co-operative Group appears to have woken up to the challenge its banking arm faces, announcing more high-profile hires yesterday. It has brought in Richard Pennycock from Morrison's as finance director and Richard Pym, the former boss of Alliance & Leicester, to chair its bank.
The latter makes a lot of sense: he ought to have learned a few things about fixing bad banks as chairman of the bad bits of Northern Rock that remain in Government hands. The problem he and his colleagues face is how they can source fresh capital.
The mutual structure is an enticing one for financial institutions. In theory, without shareholders, it ought to result in a better service for customers.
In practice mutuals have failed because, lacking even the limited oversight the City provides, they have often been run in the mutual interests of their directors, whose ambitions sometimes outweigh their abilities. When those ambitions run aground their core problem is that they can't simply tap the market for more. Their capital position is what it is. The only real cure for what ails Co-op's bank is the hope that sufficient retained earnings will be generated over time to fix it. Co-op may be banking on Mr Pym's appointment to persuade the regulators to indulge it with that.
- 1 Should Apple buy Greece?
- 2 Michael Douglas regrets 'embarrassing' Catherine Zeta-Jones with oral sex comments
- 3 Drummer Lee Rigby's family reject 'extremist' groups using Woolwich murder for political gain
- 4 Tunisia hotel attack: Locals form 'human shield' to protect hotel from gunman Seifeddine Rezgui
- 5 Fox News anchor asks 'what's to prevent' three people from marrying after same-sex marriage legalised
The moment a Queen's Guard soldier lost it and drew his gun at annoying tourist
Greece crisis: The wider lesson is that it’s time to abandon this failed experiment in currencies
'I wish the BBC would stop calling it Islamic State' – David Cameron unleashes frustration at broadcaster
Extend Right To Buy to tenants of private landlords, Labour's Jeremy Corbyn says
David Cameron struck double blow in his hopes to win Britain a new EU deal
Pentagon accuses Russia of 'playing with fire' over nuclear threats towards Nato
iJobs Money & Business
£22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...
Negotiable: Recruitment Genius: This extremely successful and well-established...
Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...
Competitive (Freelance) : Guru Careers: An Investment Writer / Stock Picker is...