THE CO-OPERATIVE Bank’s advisers on its aborted attempt to buy 632 Lloyds branches defended their part in the botched sale yesterday, insisting their advice was robust.
JP Morgan’s Tim Wise, part of the team that advised Co-op, told MPs his bank had given “dispassionate and conservative” advice, despite the majority of its payment being dependent on the deal going through. JP Morgan was due to be paid £7m in total – including £5m on completion.
Andrew Tyrie MP, chair of the committee, said any adviser paid on completion had “considerable financial interest” in closing the deal, adding that the arrangement was “asking for the objectivity of a saint not to be biased in thinking as you prepare this advice that you’d like to see a particular outcome”.
But Wise denied a bias: “In terms of one’s reputation and integrity, and ability to stay in business whether it’s individually or corporately, it is absolutely dependent on giving objective advice.”
The committee also grilled auditor KPMG on its role in Co-op’s disastrous 2009 takeover of Britannia, for which it received £1.3m in fees. KPMG’s Andrew Walker said the firm had done a “good piece of work,” and said it had not been given access to study Britannia’s commercial loan book after it was acquired.