THE FORMER boss of the Co-operative Bank yesterday claimed he warned the bank of “disaster” if it tried to buy 632 Lloyds branches in the middle of other major projects to shake up how the lender worked, but was ignored by the board.
Ex-chief executive Neville Richardson also claimed he had no responsibility for the bank’s subsequent capital problems, which met with criticism from the Bank of England (BoE).
He said he told the now-troubled Co-op Group’s board in 2011 the bid could end in “collapse,” but his concerns were overruled and he was pushed out of his job.
The Co-op tried to buy the ‘Project Verde” branches, but had to drop out earlier this year.
Just months later it emerged the bank had a £1.5bn capital hole.
“If the bank had not had resources and many key people diverted to Verde, the operating profits would not have been as bad as they were” and so the capital position would have been better, Richardson told MPs. “At the time I used the word ‘disastrous’ and warned of the collapse of the banking system.”
Richardson ran the Britannia Building Society before its ill-fated merger with Co-op. He denied its loanbook hampered the tie-up.
The BoE said: “We strongly disagree with Neville Richardson’s view regarding the Britannia loan book situation.” Co-op Bank was unavailable for comment.