Apr. 11 - The dramatic saga of the Co-op continues to unfold as the Co-op Bank reports a £1.3 billion loss and apologises to customers - but says it can raise funds to help fill a hole in its finances. David Pollard reports.
It's salt into the wounds of a once proud British institution. A day after its senior independent director announced his plan to resign from the Co-op Group, the Co-op Bank has reported a massive loss of 1.3 billion pounds. And has issued an apology - chief exec Niall Booker saying it appreciates that customers feel angry over past failings. Despite everything, it says it's still confident it can raise extra funds to secure its future - even if some investors see that as a hard sell. Jasper Lawler is Market Analyst at CMC Markets. SOUNDBITE (English), Jasper Lawler, Market Analyst, CMC Markets, saying: ''There is a lot of uncertainty around the Co-op at the moment .... It all speaks to a sort of general negative sentiment from inside the Bank and so then as an outsider investing, you know, it definitely leaves a little trepidation.'' The Co-op group owns nearly a third of the bank - and has been brought to the edge by a 1.5 billion pound hole in the Bank's finances, the arrest of its chairman on drugs charges, and the resignation of its chief exec over - in his words - its ''ungovernable'' structure. Before announcing his intention to quit, independent director Lord Myners too, was trying to address the same issues - including the powers of the board. George Hay, European Financial Editor, Reuters Breakingviews. SOUNDBITE (English), George Hay, European Financial Editor, Reuters Breakingviews, saying: ''The fact that he's resigned rather underscores the fact that the big problem with his, with what he was trying to do is that it required all the people on the board to vote for it, and surprisingly enough, they don't want to.'' Which could leave the group adrift - and investors looking to the hedge funds which control the Bank as the ones to force change. SOUNDBITE (English), George Hay, European Financial Editor, Reuters Breakingviews, saying: ''This thing doesn't have shareholders who can say 'what the hell is going on?' And the members, one of Myners' key points was that the members dont' have enough power to drive change. So it's really got to be the guys who've leant the one billion pound plus net debt to these guys, to the Co-op group.'' The hedge funds were brought on board to help fill a one and half billion pound shortfall at the Bank. Last month the bank said it needed to raise a further 400 million pounds to cover the costs of past financial misconduct.