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Rescue plan for Co-op Bank will see hundreds of jobs lost

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  • 16/07/2013
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Rescue plan for Co-op Bank will see hundreds of jobs lost
The £1.5bn rescue financing of the Co-operative Bank by its parent will come at the cost of hundreds of jobs, according to reports today.

The beleaguered bank’s parent – the Co-operative Group –  also plans to announce a cost-cutting plan alongside further details of the restructuring in the autumn.

While no figures have yet been decided, any serious reduction of costs would be certain to lead to many hundreds of job losses among Co-op Bank’s 10,300 workers, according to the The Times.

With the bank planning to slim down to a pure retail play serving only personal customers and small firms, the scope to take the axe to its corporate banking division, is considerable.

The crackdown on the bank’s annual expenses of £600m comes as it attempts to force financial haircuts of £500m on some bondholders and subordinated debt-holders.

Unless they agree to the plan, which requires approval by 75-80% of the various classes of noteholder, the bank will be put into resolution and officially wound down from its present state.

Co-op is also in the throes of selling its general insurance and life assurance divisions and will use the proceeds, plus a new £500m group bond issue, to finance its share of the rescue.

Mark Taber, who says he represents 15,000 small bondholders, has written to Martin Wheatley, head of the Financial Conduct Authority, calling on him to protect small bondholders.

 

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