Co-operative Bank in 'advanced' talks with investors over rescue package
Reports had surfaced over the weekend that the struggling lender is close to announcing a £700m deal that would see it dodge being wound down
The Co-operative Bank, which was put up for sale in February, has said that it is in advanced discussions with existing investors over a rescue package.
The bank said on Monday that the talks centre on a “prospective equity capital raise and liability management exercise”.
The lender added that discussions are also ongoing regarding the separation of the Co-op Group pension scheme, which would clear the path for a takeover.
Reports had surfaced over the weekend that the struggling lender is close to announcing a £700m deal that would see it dodge being wound down.
“The bank notes recent media speculation and confirms that it is in advanced discussions with a group of existing investors with a view to a prospective equity capital raise and liability management exercise,” the lender said.
In March the bank, which has four million customers, said its ability to meet longer-term UK bank regulatory capital requirements has been hampered by low interest rates and higher than anticipated transformation and “conduct remediation” costs.
Co-op Bank almost collapsed in 2013 after the discovery of a £1.5bn black hole in its finances and it was forced into a painful debt-for-equity swap. As a result, the loss-making lender is now majority controlled by US hedge funds.
The Co-operative Group owns just 20 per cent of the bank.
The lender added: “The bank continues to fully discuss both the sale process and the capital raise options with the Prudential Regulation Authority (PRA), which has welcomed the sale and capital raise process.”
Press Association
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