Co-operative Bank report blames 'disastrous year' on governance

Sir Christopher Kelly’s findings will be published next week

A new independent report into the Co-operative Bank's 'disastrous year' is set to be scathing about former executives and board members.

Sir Christopher Kelly’s report is due to be published next week but a draft version says the seeds of the near collapse of the bank lay with its takeover of Britannia Building Society in 2009, according to the BBC.

Co-op Group, which commissioned the independent report last July, declined to comment on Kelly’s findings, which will be published ahead of the mutual’s annual meeting on May 7. It is understood Co-op Group has not actually seen the draft report but individuals named in it have.

These are likely to include Neville Richardson, the former chief executive of Britannia and then Co-op Bank, Peter Marks, the former chairman of Co-op Group, and Barry Tootell, a former chief executive of the bank who led it in the aborted attempt to take over 630 Lloyds branches known as Project Verde.

The report is also said to be highly critical of Co-op Bank’s governance and could single out individual board members, including former chairman Reverend Paul Flowers, who has been charged with drug offences.

It will also mention the £1.6 billion takeover of rival supermarket chain Somerfield, which took place in 2009. Although this was not specifically in Kelly’s brief, he is expected to say it took up much of management’s attention, which should have been spent on the bank and its Britannia deal. Last week, Co-op Group interim chief executive Richard Pennycook revealed the group will have got rid of 60 per cent of the Somerfield stores it bought by 2016.

Kelly, a former career civil servant and chairman of the Committee on Standards in Public Life, began his review last September. His spokesman said today: “This is an independent review which Sir Christopher Kelly is due to publish next week. We cannot comment further.”

The report is expected to say Co-op’s due diligence over Britannia was “extremely cursory” and that the group was “culpable”. This is likely to be challenged by some of those named in the report who could claim that it is factually inaccurate.

The collapse of Project Verde led to the discovery of the £1.5 billion gap in Co-op Bank’s balance sheet. This, in turn, sparked its bail out mainly by US hedge funds which owned its debt and swapped its for a 70 per cent stake in the bank.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Life and Style
Couples have been having sex less in 2014, according to a new survey
New Articles
i100... with this review
Holly's review of Peterborough's Pizza Express quickly went viral on social media
footballTim Sherwood: This might be th match to wake up Manchester City
Arts and Entertainment
musicHow female vocalists are now writing their own hits
New Articles
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Blahnik says: 'I think I understand the English more than they do themselves'
Arts and Entertainment
Michelle Dockery as Lady Mary Crawley in Downton Abbey
TVInside Downton Abbey series 5
Life and Style
The term 'normcore' was given the oxygen of publicity by New York magazine during the autumn/winter shows in Paris in February
fashionWhen is a trend a non-trend? When it's Normcore, since you ask
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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