The mutual’s annual results, due for release on Thursday, will see it post by far the biggest loss in its 170-year history, according to the FT.
Of most concern is the Co-operative Bank’s £1.3bn capital shortfall. The Co-op Group has just a 30% stake in the bank following the latter’s December recapitalisation.
The loss means the firm is unlikely to find the £120m needed to participate in the bank’s £400m rights issue, and it could be forced to sell more of its stake, according to the paper.
Co-op is also under pressure to buy back its £1.2bn debt to lenders including Barclays, Royal Bank of Scotland and Lloyds Banking Group.
The company is separately troubled by management and governance problems as it tries to implement reforms proposed by Lord Myners, who himself quit the board last week.
This follows the departure of Euan Sutherland and the drug scandal surrounding former chairman Paul Flowers earlier this year.
