The Co-operative Bank announced on Thursday that a combination of recent scandals and the relative ease at which customers are now able to switch banks has led to the bank losing customers. However, the Co-op did not disclose how many customers had left the bank.
The self-styled ethical lender admitted that it had suffered "reputational damage" in the wake of its former chairman Paul Flowers resignation. Reverend Flowers was arrested last week as part of an investigation into the sale of illegal drugs.
The bank said on Thursday:
These recent events, together with the competitive landscape in which the bank operates, the introduction of seven-day account switching and the associated increased competitor marketing activity at a time when the bank has been constrained in its ability to undertake its own marketing activity, may be a contributing factor to an increase the bank has seen in the switching out of current accounts.
Friday marks the first deadline for the bail-in of the Co-op, where hedge-fund investors help to plug a £1.5bn gap in the bank's balance sheet. Bondholders are to take a 70 per cent stake in the bank with the Co-operative group retaining 30 percent.