The Co-operative Group has lost control of its banking arm to a group of US hedge funds.
The mutual’s stake in Co-op Bank will be reduced to 30% as part of the deal with bondholders to bridge a £1.5bn capital shortfall. The Guardian reports how much of the losses piled up were a result of commercial property and buy-to-let loans made by Britannia building society which the Co-op Bank merged with in August 2009 with a view to creating a “super mutual” that would be big enough to take on the high street banks. More than 10% of commercial loans, valued on the books at £1.7bn, turned out to be “impaired” and possibly heading for default.
22/10/13 Guardian 1, 25
Financial Times 1, 16, 20
Times 37, 38
Daily Telegraph B1, B2m B5
Independent 48
