Ex-Co-op boss was not worried over Britannia

Tim Wallace
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FORMER Co-operative Bank boss Barry Tootell yesterday said he was not concerned about the Britannia merger, as regulators and auditors had not flagged up any problems.

Tootell told MPs the Financial Services Authority had reviewed the building society and found only minor losses in its loan book.

Since that takeover in 2009 losses on Britannia loans have grown to dangerously undermine the Co-op’s capital position.

As a result the group is in talks with bondholders which are expected to result in investors including US hedge funds taking most of the equity in the bank.

And Tootell denied misleading investors on the bank’s capital position this year – it reported a capital ratio of 9.2 per cent just months before the Bank of England found a £1.5bn capital hole.

“We were very careful not to mislead the markets by using terms such as ‘strong’ too glibly,” he told the Treasury Select Committee.

Tootell resigned from the bank in May after the bid to buy 632 branches from Lloyds collapsed and ratings agency Moody’s slashed the bank’s credit rating to junk status.