Saturday 22nd October 2016                 Change text size:

Co-op bank prepares to sell renewable lending division

co-op door By Felix O via Flickr

The Co-operative Bank is preparing to sell off its renewable energy lending division as part of the restructuring process amid concerns over debt-piling.

The bank, which is currently undergoing a refinancing deal in an attempt to plug the £1.5billion black hole in its balance sheet, said in a statement that it would be selling its Renewable Energy and Asset Finance (REAF) portfolio, which is worth around half a billion pounds.

The portfolio lends predominantly to financing wind farms, but has also seen lending to projects such as hydro, heat and power.

In a statement, a spokesperson for the Co-operative Banking Group said, “The REAF portfolio has low yields and approximately a third of its projects are still in the development phase.

A portfolio sale is deemed to be the optimum exit strategy for these assets. This will take the form of a standalone renewable business through a fund structure which may include REAF staff in the on-going management.”

It was also announced on Saturday that the Co-operative Group, which owns the bank, would not be paying dividends to its members this year, instead offering 10% off coupons within its retail sector.

The bank was recently recapitalised in a bid to save it without having to turn to the taxpayer, but with the Co-operative Group retaining 30% of the share, some have voiced concerns as to whether the bank can remain ethical.

Euan Sutherland, CEO of the Co-operative Group, pledged that the bank would stand by its ethical principles, which he says will be embedded into the constitution.

Further reading:

Ethics, mutuals and the Co-operative Bank’s unclear future

Co-op’s decision to exit local authority banking ‘shortsighted’

Co-op Bank to close 15% of branches, as hedge funds take control

We will stand by our ethical principles, Co-op Bank boss assures charity customers

Co-op Bank can no longer be ethical, says ex-CEO

There are currently no comments.

Register with Blue and Green

To leave a comment on this article, fill in your details below to register, alternatively if you are already registered you can login here

Subscribe for our Newsletter

Time limit is exhausted. Please reload CAPTCHA.

A password will be e-mailed to you.