Co-op faces series of new probes

Tim Wallace
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THE CITY watchdog yesterday warned more probes could be on the way for the Co-op Bank, indicating its current crisis will not be over any time soon.

Financial Conduct Authority (FCA) boss Martin Wheatley confirmed he is looking into the bank’s position.

“There are a number of specifics we will be looking at which potentially could lead to investigations, which could date back to the original takeover of the Britannia, and could relate to other events of the last five years,” he told the BBC’s Sunday Politics.

It comes on top of an inquiry the government plans to launch into the Co-op’s finances and the behaviour of disgraced ex-chairman Reverend Paul Flowers. It will also follow an ongoing police investigation, which began with the arrest of Flowers on Friday in a drugs probe.

Flowers resigned as chairman in the summer after a £1.5bn capital hole was uncovered at the bank, and last week was revealed to have bought drugs including crystal meth and crack cocaine.

Meanwhile the bank and group are expected to increase the welfare support on offer to directors.

Reverend Flowers in part blamed the stresses of the job for his drug taking, and although counselling is on offer to staff it is likely the bank will promote it more heavily internally in an effort to make sure senior staff know it is available.

It came as the Co-op Bank prepares to fight back against the damage to its image. The bank is expected to play to its strong figures in customer service and satisfaction.

However it is expected the bank will have to delay this because it is still going through a restructuring.

Creditors will soon take around 70 per cent of the equity in the bank, in a deal to plug its £1.5bn capital hole.