The Co-operative Group is to axe 15 per cent of its floundering bank's 324 branches by the end of next year, as part of a radical restructuring plan unveiled today.
Sky News' Mark Kleinman reported on Saturday that the bank is to cut more than 1,000 jobs as part of the restructure, which will see Co-op inject £462m into its lending arm.
Group chief executive Euan Sutherland took a positive stance on Radio 4 this morning, pointing out that the bank has been rescued without taking "one penny" from the taxpayer. He gave nothing away on job cuts.
The bank was forced into restructuring in order to fill a £1.5bn capital hole found by UK regulators in the summer. The mutual will keep a 30 per cent equity stake, making it the largest single shareholder.
After bondholders disagreed with Co-op's initial plans to deal with the debt, the new ownership structure will see a section of the its lower tier two bondholders (a group of US hedge funds) inject £125m into the bank.
The relaunched bank will be smaller and simpler, focusing on UK retail and small business customers, Co-op said today. It warned, however, that the bank will not be profitable this year or in 2014 and that "no assurance" could be given that it would be profitable in following years.