New Co-op boss pins hopes on savers’ loyalty

Tim Wallace
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THE CO-OPERATIVE’S happy customer base and reputation for ethical banking should keep the lender growing despite its capital troubles, the bank’s new chairman Richard Pym told City A.M. yesterday.

A run of problems has struck the bank, including a six-notch downgrade of its bonds to junk status by ratings agency Moody’s, the collapse of its bid to buy 632 branches from Lloyds and the departure of chief Barry Tootell.

And despite selling several parts of its business, it is feared the bank is short of the capital levels required by regulators, potentially leading to drastic solutions like imposing losses on bondholders.

“I am not able to speculate on any of these issues for the future,” Pym said, declining to offer a plan to solve the bank’s troubles or to reassure investors.

“The board will be working to answer those questions in co-operation with the Bank of England’s prudential regulation authority. But the bank is loved by customers and has a very high advocacy rate.”

Pym’s CV includes a stint as chief executive of Alliance and Leicester, while he will remain in his post as chairman of UK Asset Resolution, the entity responsible for running down the so-called bad bank parts of Northern Rock and other failed lenders.

The Co-operative has appointed Richard Pennycook as its group finance director, the position he had for eight years at Morrisons.