Co-op bank won't lend to new corporate clients

(Source: Reuters)

The Co-operative bank has announced that it will not be making new loans to corporate clients.

We are not offering new loans to new corporate customers but are continuing to provide facilities for existing customers.

Our banking reporter Tim Wallace on Co-op's continuing woes:

The banking arm has a capital hole of around £800m, which it hopes to fill by selling its life and insurance arms, and running down bad loan portfolios.

But if the sales do not raise enough money, the bank will come up short.

And analysts fear that, in a stressed situation, the capital hole may even increase to £1.8bn. The bank can shrink its balance sheet or issue bonds to raise the capital.

(Full article)