Former Co-op boss defends Britannia deal

Former Co-op Financial Services boss grilled over "bizarre" Britannia merger

One of the architects of the Co-operative Bank’s disastrous merger with Britannia Building Society this morning insisted that that it was “the right thing to do”.

Former Co-operative Financial Services boss David Anderson spoke after Conservative Andrea Leadsom accused him of embarking on the deal at a “bizarre” time at the Treasury Select Committee.

The merger was announced in 2008, during the heart of the financial crisis. Mr Anderson then stepped down in favour of Britannia’s boss Neville Richardson. 

But he said: “At that point both businesses were doing quite well,” he said. “We were the clearing bank for Northern Rock. It (the way loans were rapidly going bad and the banking crisis) was a constant source of discussion.”

Mr Anderson appeared before MPs in the midst of revelations that the stricken bank’s chairman Paul Flowers had been caught on film buying drugs. This morning Co-operative Group chairman Len Wardle quit with immediate effect as result. He had been planning to go in May. 

Co-op has surrendered majority ownership of the bank to bondholders after regulators said it had a £1.5bn black hole in its accounts. 

Asked if its near collapse was “inevitable” Mr Anderson said: “I’ve agonised over that. I believe the businesses together needn't have led to the difficulties, they could have been managed in a successful way. They would have faced challenges alone.

“For some considerable time afterwards this didn't look like a daft thing to do. Clearly it hasn’t turned out as we'll as we would have wanted,” he said. 

He also defended the work of the bank’s advisors - including KPMG - which did due diligence on Britannia and received “hundreds of thousands, not millions” in fees. 

“I honestly believe they did the job we could have expected them to do at the time. It was clear to use that there were some parts of that (Britannia’s) loan book that were appraised differently to the way we would have appraised them. We evaluated those as acceptable.”

Mr Anderson confirmed Mr Richard’s claim that Co-op approached Britiannia about the merger.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Highs and lows of the cast's careers since 2004
News
news
New Articles
i100... with this review
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
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

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam