Neville Richardson, who became chief executive of the Co-op Bank after its merger with the Britannia Building Society in 2009, gave evidence to the Treasury Select Committee on Wednesday.
He insisted the Co-op’s finances were in good shape at the time of his resignation in 2011. He disputed the conclusions of Prudential Regulation Authority chief Andrew Bailey that the state of the Britannia loan book was worrying, describing it instead as “quite normal”.
Committee chairman Andrew Tyrie said after the session: “There appears to be a yawning gulf between the evidence the committee heard today from Mr Richardson and the evidence we heard previously from Mr Bailey.
“The committee will be investigating this a good deal further.”
The Bank of England, which houses the PRA, was also quick to respond. It said: “We strongly disagree with Neville Richardson’s view regarding the Britannia loan book situation. The evidence Andrew Bailey gave to the TSC was correct.”
Speaking about the issue for the first time, Richardson blamed the Co-op Bank’s £1.5bn capital hole on the overambitious strategies of the Co-op group.
In a statement, the Co-op said it was very willing to assist the Treasury Select Committee in any way that was helpful: “We agree with the importance of understanding all the issues, which is why we have established an independent inquiry, the findings of which will be made public.”
