The boss of Secure Trust Bank said today he is not interested in snapping up Co-op Bank, after reporting his bank had a record year for profits.
Co-op Bank, which is currently 20 per cent owned by the wider Co-operative Group, announced last month it was putting itself up for sale.
Up until that point, Co-op Bank had been embarking on an ambitious turnaround plan, after a £1.5bn black hole was found in its accounts in 2013. However, the challenger said outside factors, such as the lower for longer interest rate environment, had hampered its ability to raise capital organically.
Now, Paul Lynam, chief exec of Secure Trust, has announced he is not interested in becoming Co-op Bank's new owner, cutting yet another banking name off the list of potential rescuers.
"We're not interested in the Co-op Bank as a whole, it's just too fraught with risk and it's very difficult to see how we could construct a compelling business case to buy it," he told the Telegraph.
Secure Trust also announced today it had made a record profit after tax for the year of £137.5m, up 379 per cent from £28.7m the year before.
However, this figure included a gain on disposal of £116.8m from ditching subprime lender Everyday Loans Group last April. Statutory pre-tax profits on continuing operations, on the other hand, inched up to a much more modest £25m, up just one per cent compared with £24.8m the year before.
Shares in Secure Trust are trading down 1.2 per cent at 2,089.06p at time of writing.
Lynam's words will come as a blow for Co-op Bank, as the pool of potential purchasers is gradually dwindling.
In an interview published yesterday with Spanish newspaper Cinco Dias, Sabadell chairman Josep Oliu shot down claims his firm was interested in picking up the struggling challenger, saying: "That bank does not fit our strategy right now."
It emerged Sabadell might be interested in buying Co-op Bank just hours after the news it was selling itself was first announced.
Sources have also previously told City A.M. they are put off buying the bank because of the size of the bill they might be asked to stump up to plug the deficit in its pension scheme.
It has previously been reported potential buyers of the bank have until 4 April to get their bids in, while the Bank of England's Prudential Regulation Authority is becoming increasingly concerned no buyer will be found and has asked external advisers to start working on an alternative plan for the lender.