Ethical stance costs Co-op Bank £8.7m revenue from spurned deals
The Co-operative Bank turned down £8.7m in business last year because of ethical and ecological concerns, according to figures released today.
The amount of business lost to the bank because of its ethical stance rose from £6.9m the previous year. The Manchester-based society also reaped rewards from its holier-than-thou stance as it attributed 34 per cent of its £132m profits last year to its ethical policies. That compares with 29 per cent in 2003.
More loan and savings account customers joined up and stayed with the bank for ethical reasons, it said.
Simon Williams, a spokesman for the Co-op, said: "When we launched our ethical stance back in 1992, its initial appeal was very much to individual customers who wanted to know what happened to their money while it was in the bank. Now, 13 years on, 36 per cent of personal customers and a quarter of the bank's corporate customers join us precisely because we are prepared to turn away certain sorts of business."
Refusing to provide banking services to companies on ecological grounds cost the bank £3.8m last year, while the cost of turning away business for animal welfare reasons was £1.29m.
Declining to do business with companies associated with poor human rights and labour practices lost it £847,000, and rebuffing organisations that are involved in the production of controversial chemicals cost it £688,000.
The number of companies turned down increased because the Co-op widened the scope of background checks made on business customers applying for an account. For instance, in property finance it routinely assesses the ethical record of not only the developers, but also any tenants that may underpin the development or acquisition.
Mr Williams said: "Our customers expect us to rigorously police our ethical stance and so we not only look into the activities of a would-be customer but also the supply chains in which they are involved.
"For instance, we investigate a company to see if it is concerned directly in the extraction or production of fossil fuels, and also whether they supply products and services of strategic importance to such areas."
The Co-op employs more than 4,200 people at 100 branches in the UK and has 2 million customers. It is part of Co-operative Financial Services, which includes the internet bank Smile and the Co-operative Insurance Society, and has more than 7 million customers.
The Co-operative Bankreported last month a 1.5 per cent rise in pre-tax profits to £132m in the year to 8 January, marking the 11th consecutive year of record profits.
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