Co-operative Bank loses customers after Paul Flowers scandal
Thursday 28 November 2013
The Co-operative Bank has admitted for the first time it is losing customers after a series of scandals including alleged drug-taking by former chairman Paul Flowers.
In a statement to the stock market the bank said: “Recent events may have caused some brand and reputational damage, but it is too early to form a definitive view as to the extent of such damage.
“These recent events, together with the competitive landscape in which the bank operates, the introduction of seven-day account-switching and the associated increased competitor marketing activity at a time when the bank has been constrained in its ability to undertake its own marketing activity, may be a contributing factor to an increase the bank has seen in the switching out of current accounts.”
The bank would not reveal how many out of its 1.66 million current accounts it has lost in the last three weeks.
Unlike the run on Northern Rock in 2007 which saw savers queuing round the block to withdraw their money, Co-op said that its retail deposit base “remains broadly stable”.
The bank said the investigation ordered by the Chancellor and the likelihood of further inquiries by regulators would take up management time and cost it money not already provided for in its business plan.
Today is the first deadline for the bail-in which will see hedge fund investors in the bank’s bond help to plug its £1.5bn balance sheet gap. The bank yesterday tweaked the terms of the bonds for equity swap which will see hedge funds end up owning 57 per cent of the shares.
The change were endorsed by the so-called LT2 group of bondholders, the major hedge funds group, which said it “is fully supportive of the new management team for the bank led by the recently appointed chairman and chief executive”.
Early supporters of the plans have until this afternoon to accept the deal to receive the best terms.
There is a court hearing for the plan on 2 December and the final dealine for bondholders to vote on its 11 December.
Olympic diver has made his modelling debut for Adidas
- 1 Daniele Watts: Django Unchained star's white boyfriend Brian Lucas confirms LAPD internally investigating 'racist' detainment
- 2 Isis release 'Flames of War' video warning Obama of attacks troops could face in Iraq
- 3 Pakistani passenger power forces two politicians off plane
- 4 Say yes to 'no-poo': It's been three years since I stopped washing my hair
- 5 John Travolta addresses former pilot's gay romance allegations publicly for the first time: 'That was the lowest I'd ever felt'
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Portuguese academic says British are 'filthy, violent and drunk'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...