Co-op Bank offers customers £100 to open current account

The Co-operative Bank has introduced a £100 current account switching offer that also includes a £25 donation to a leading charity of the individual’s choice, as it looks to recover from its recent turmoil.

The bank’s “cornerstone” of its recapitalisation plan was completed in December. The agreement saw hedge funds take a 70% stake in the bank and led to questions around whether its ethical values could remain.

The bank’s former CEO said the involvement of hedge funds, which are there to make a profit, meant the bank could no longer be dubbed “ethical”. The bank however has repeatedly stated that its ethical values are in its constitution and has sought to reassure customers that it will stand by its principles.

Last month, it was also revealed that the bank was facing two separate investigations into its near collapse. The Financial Conduct Authority and the Prudential Regulation Authority will carry out the investigations.

Steve Britain, commercial director at the Co-op, said, “We know we have a lot to do to restore trust in our business but with our capital position strengthened, we are able to begin to talk to customers again about the products and services we can offer them.

“This offer gives new customers the opportunity to enjoy the same benefits as our existing customers including award winning levels of service, an ethical approach and preferential rates.”

The current account switching service, which allows individuals to change current account providers within seven days, launched in September and has led to banks offering incentives to entice new customers.

Research suggested that consumers where switching based on reputation and customer service and drifting away from traditional high street providers. In November, the Co-operative Bank’s figures showed just a 1% net gain in customers. The figure is likely to have been affected by the negative news surrounding the mutual.

Commenting on the Co-op’s new incentives, Jafar Hassan, personal finance expert at uSwitch.com, said, “With the current account switching service celebrating its six-month anniversary in March, banks are once again upping their game in a bid to attract new customers and retain existing ones, so this is a clever move by the Co-op Bank.”

He added that following recent unwanted media attention the Co-op could get back into the public’s good books by playing on its ethical approach. However, Hassan added that consumers should consider interest on balances and cashback rewards over cash incentives, as they could be more valuable in the long run.

Further reading:

Co-op Bank in discussions to sell shares in Unity Trust

Co-operative Bank to face to regulatory inquires

‘Cornerstone’ of Co-op Bank’s recapitalisation plan completed

Customer service and reputation main driver for consumers switching current accounts

Switching your current account just got easier – but now what?