Economy
Co-operative Bank drafts in ethics chief to lead new committee
The Co-operative Bank has drafted in the help of an ethics expert, who will now head its newly-formed ethics committee in an attempt to clean up its image after a series of scandals and heavy losses.
Laura Carstensen is a former deputy chairman of the City’s competition watchdog. The committee she will lead was formed amid growing pressure for the bank to stick to its ethical roots, after 70% of the company’s shares were sold off to hedge funds and other investors.
Carstensen said in a statement, “It is vital for the UK banking system, for society and for the Co-operative Bank that values and ethics is at the heart of what we do.”
The Co-op also announced on Tuesday that it had completed fundraising of around £400m of capital, which will now be used to return to a focus on retail and SME customers.
A spokesperson for the bank told Reuters, “This capital will strengthen the bank for our customers and will assist in the implementation of our four to five year business plan to return to our roots as a bank focused on our retail and SME customers.”
The new fundraising exercise has now seen the overarching Co-operative Group’s stake in the bank reduced from 30% to 20%. The move was seen as necessary, after the group last month reported annual losses of £2.5 billion.
Efforts to increase the ethical and responsible image of the bank come after a deal to buy more than 600 Lloyds branches in 2012 revealed a £1.5 billion shortfall in its accounts.
It has since been rocked by a number of scandals, including remuneration of the group’s former chief executive Euan Sutherland and the bank’s former chairman Paul Flowers being caught up in a drugs scandal, just hours after appearing before the banking standards select committee.
Photo: Howard Lake via Flickr
Further reading:
Co-op members unanimous on group overhaul
Co-op Group stake in bank further diluted as £400m fundraising begins
Kelly review tells Co-operatives Bank’s ‘sorry story’
Co-op board ‘manifestly dysfunctional’, says review by Lord Myners