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2013 News

Update on recapitalisation plan for The Co-operative Bank

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, NEW ZEALAND, SOUTH AFRICA, JAPAN, CANADA OR SWITZERLAND AND OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

The Co-operative Group and The Co-operative Bank PLC

Update on recapitalisation plan for The Co-operative Bank

The Co-operative Group, the Co-operative Bank and bondholders continue to work on the detail of a recapitalisation plan for the Bank. Good progress is being made and it is expected that a further announcement with full details of the plan will be made on 4 November 2013, with the recapitalisation being implemented by the end of the year.

Investor Enquiries:
0800 731 2310
www.co-operative.coop/bondholders

Media Enquiries

The Co-operative Group
Russ Brady 07880 784 442

Tulchan Communications 0207 353 4200
Susanna Voyle
Jonathan Sibun

Cautionary statements

This announcement contains or incorporates by reference certain "forward‐looking statements" regarding the belief or current expectations of the Bank or the Group (as applicable) about the Bank's financial condition, results of operations and business and the transactions described in these results. Generally, but not always, words such as "may", "could", "should", "will", "expect", "intend", "estimate", "anticipate", "assume", "believe", "plan", "seek", "continue", "target". "goal", "would" or their negative variations or similar expressions identify forward‐looking statements. Such forward‐looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Group and the Bank and are difficult to predict, that may cause the actual results, performance, achievements or developments of the Group and the Bank or the industries in which they operate to differ materially from any future results, performance, achievements or developments expressed or implied from the forward‐looking statements. A number of material factors could cause actual results to differ materially from those contemplated by the forward‐looking statements. In particular, the Bank’s business plan is subject to ongoing discussions with the PRA and the recapitalisation plan is subject to finalisation and its implementation is subject to a number of inherent risks.

Failure to implement the recapitalisation plan may result in regulatory intervention that could reduce or eliminate the value of the equity and modify, reduce or eliminate debt payment obligations and may even result in the Bank no longer being able to continue as a going concern. Even if the recapitalisation plan is successfully implemented, the Bank may, from time to time, require additional capital. Factors which could adversely affect the Bank’s capital position and which may result in additional capital being required include worsening economic or market conditions, continuing deterioration of asset quality, the unavailability or withdrawal of funding, failure to implement the Bank’s restructuring and cost reduction programme, and changes in regulatory capital requirements. Should such factors occur prior to completion of the recapitalisation plan, they might impact the launch or successful implementation of the recapitalisation plan. The Bank’s strategy is also untested and the Bank may ultimately be unsuccessful in implementing its strategy, in particular in reducing its non-core assets in a controlled and capital efficient manner and restructuring its cost base as and within the timeframe currently anticipated. These, and other risks and uncertainties, could, individually or cumulatively, have a material adverse effect on the Bank’s business, results of operation, financial conditions or prospects. The forward-looking statements contained or referred to in this announcement speak only as of the date of this announcement.

Neither this announcement, the publication in which it is contained nor any copy of it may be made or transmitted into the United States of America (including its territories or possessions, any state of the United States of America and the District of Columbia) (the “United States”). Neither this announcement, the publication in which it is contained nor any copy of it may be taken, transmitted or distributed, directly or indirectly, into Australia, New Zealand, South Africa, Japan, Canada or Switzerland or any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction. Any failure to comply with this restriction may constitute a violation of securities law in those jurisdictions. The distribution of this announcement in other jurisdictions may also be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefore. The distribution of this announcement in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about, and observe, any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

In particular, this announcement does not constitute an offer for sale of, or a solicitation to purchase or subscribe for, any securities in the United States. No securities of Co-operative Group or Co-operative Bank have been, or will be, registered under the US Securities Act of 1933, as amended (the "Securities Act"), and securities of Co-operative Group or Co-operative Bank may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of the securities in the United States.

Investors should not make any investment decision regarding any transferable securities to which this announcement relates except on the basis of information to be contained in the public documentation to be published in due course in connection with the recapitalisation plan.