Simon English: Who was to blame for the horrendous mismatch of Co-op and Britannia?

Outlook The press release was effusive. Britannia and Co-op Financial Services "unveil plans for super-mutual". The merger was to create "a unique" (that's always a worrying word), "ethical" (ditto), alternative to the nasty big banks.

That was in January 2009. The outcome four years later is a complete shambles, from which no one emerges with credit, not least CFS. Its credit rating has been slashed to junk status, the chief executive Barry Tootell has been allowed to spend more time with his family, and serious questions remain about the future of the company.

It will survive, we assume, but at what price?

In retrospect it seems clear that this deal was the mutual world's equivalent of the merger of HBOS and Lloyds. One was a prudently run outfit, the other a growth-obsessed, hard-charging affair that operated on the basis that the housing market would never run out of steam, that there would never be another recession.

The City trader expression for what happened next goes like this: if you merge ice-cream and horse manure, you get horse manure.

The Britannia loaded on to the Co-op all sorts of bad debts and other nasties that it didn't deserve, giving the lie to the notion that building societies avoided the worst excesses of the bad banks in the run-up to the credit crunch.

The architects of the HBOS deal have since been hounded by the press and forced to say sorry. Perhaps the folk behind the Britannia deal should suffer similarly.

Who was to blame for this awful merger? Well, no banker in Britain is actually to blame for anything. You can be assured of this if you ask them.

But let's return to that 2009 press release, and remind ourselves who was so keen to have their name in lights trumpeting this merger.

Here we have Britannia's chief executive, Neville Richardson, who later left with a multimillion-pound pay-off, bragging that the deal "offers a unique opportunity" (that word again) "to create a new force in British financial services".

Mr Richardson was last year appointed to the board of the construction company Seddon, whose chairman, Rod Sellers, says: "Neville brings exceptional strategic and financial expertise." He is also on the board of Marks & Spencer Financial Services and a member of the board of governors of the University of Manchester.

Britannia's chairman, Rodney Baker-Bates, banged on about "a strong, fair and ethical alternative". His opposite number at the Co-op, Bob Burlton, talked of "momentum within the co-operative and mutual sector".

No one can now say he was wrong about the momentum, though the direction was not as he intended.

CFS's chief executive, David Anderson, left as the deal emerged – what did he know? – but still felt able to comment on his way out that mutuals had "never been more relevant", that "people have been crying out for a new way of doing business".

Which City bankers, you are now asking, advised the Co-op on this horrendous merger? Tim Wise of JPMorgan Cazenove is the name in the frame.

Mr Wise is now chairman of the storied broker, successor to the mighty David Mayhew. Does he feel any culpability for what he helped the Co-op to do? Would he like to share it with us?

Mr Wise, those awful profiles of business people point out, is a "cricket fan and keen cook". Jolly good. Would he agree that it would have been better for Co-op members had he been busy doing a catering shift at Lord's when this deal was being engineered?

Meanwhile, sniffy remarks are being made about the non-bankers on the Co-op's board, as though this plan were their idea.

Oh, and just an aside: The public relations for this catastrophe – both sides – was done by Brunswick. Of course it was.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?