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Co-op posts £2.5bn loss after ‘disastrous’ year

by: Dan Jones
  • 17/04/2014
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Co-op posts £2.5bn loss after ‘disastrous’ year
The Co-operative group has reported a record loss of £2.5bn after a “disastrous year” during which its banking division and the wider group came close to collapse.

Coming soon after the surprise departures of chief executive Euan Sutherland and board director Lord Myners, the group’s annual results revealed a £2.1bn loss on the discontinued operations of its banking arm.

The vast majority of that loss came from trading losses sustained when the group lost majority control of the bank as part of its moves to recapitalise last December.

The group said the findings of an independent review into the bank’s capital action plan will be reported at the end of April, with the outcome of a strategy review to be announced at the group’s 17 May AGM.

Chair Ursula Lidbetter said the capital hole which emerged at the heart of the bank’s finances “risked not only its future but that of the entire group”.

“2013 was a disastrous year for the Co-operative group, the worst in our 150-year history. Today’s results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years,” said interim group CEO Richard Pennycook.

“These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are.”

The results come a day after former Co-op Bank chairman Paul Flowers was charged with drug possession.

Flowers, who resigned from the boards of the bank and the wider group in June following expenses concerns, was arrested in November following newspaper allegations over drug use.

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