Co-op bidder advised by ex-head of Northern Rock

As first reported by Sky News' City editor Mark Kleinman, a private equity firm that is being advised by the former boss of Northern Rock, Adam Applegarth, is among the bidders for Co-op's blighted insurance arm.

The bank was left with a £1.5bn hole in its finances following the Prudential Regulation Authority's ruling that it must raise the money to protect it against future crises.

Sky said that consolidator of general insurance firms, Catalina Holdings, which has backing from Apollo Management, is one of the first groups interested in the insurance business.

Applegarth was appointed by Apollo as an adviser after he left Northern Rock following its demise. Sky added that he is not thought to be directly involved with Co-op.