Today, Sir Christopher Kelly has published his independent review, jointly commissioned by The Co-operative Bank and The Co-operative Group in July 2013, into events that led to the announcement of The Co-operative Bank’s capital action plan to address its £1.5billion capital shortfall. The review includes an analysis of strategic decision making, management structures, culture, governance and accounting practices and aspects of the role of the Bank auditors. We commissioned the report to assist in identifying lessons to be learned to strengthen not only the Bank and the Group but the co-operative business model generally. We have made good progress in addressing many of the areas highlighted in the report.
“We thank Sir Christopher Kelly for the very detailed work he has done over the last eight months. We commissioned the report, together with The Co-operative Group, to ensure that there is a clear understanding of the issues that led to the capital shortfall and that vital lessons are learnt from those events. We broadly accept the findings of the report which we know will make difficult reading for our customers and will shock those new to the difficulties which the Bank, its employees and customers have faced. We do believe there are many more positive aspects of The Co-operative Bank’s culture that are not reflected in the report, for example not enough credit is given to the service ethic and empathy of our employees.
On behalf of the Bank I would like to apologise for these past failings. The new Board and executive team have been working diligently to address the shortcomings identified in the report. I would also like to particularly thank our customers for sticking with us through this dreadful period and my thousands of colleagues who provide high levels of service to them. The team I lead is committed to restoring the Bank to financial health while enhancing its commitment to the values upon which it was founded and so be the Bank our customers deserve.
It is important to remember that the report is about the problems of the past and is neither a reflection of how the Bank is run today nor the quality of the customer service our people continue to provide despite the challenges the organisation has faced.
It is clear from the report that there were serious failings in the past. The Board will consider the implications of today’s report and, bearing in mind the various external investigations into the same past events which are still ongoing, consider what action it should take, after taking appropriate professional advice.
What the Kelly Review shows is that the Bank lost its way but what is important is we are making significant progress in putting it back on track and strengthening the Bank for the benefit of our customers.
The Bank ended a very difficult year with stable liquidity and an improved capital position which we aim to strengthen further through our forthcoming capital raise. Over the past ten months we have also made significant progress in reforming how the Bank is governed and managed. The Bank’s Board looks very different today and is now managed and governed independently to the Group. There is an entirely new Executive team with the depth of financial services expertise needed to turn the Bank around and we have also been reforming and improving the Bank’s systems, processes and culture which Sir Christopher Kelly refers to in the report.
There is further work to be done but customers should be in no doubt of our commitment to return to our roots as a smaller, efficient bank focused on serving individuals and small and medium sized businesses with values and ethics at our heart. As we renew our ethical policy together with our customers later in the spring, customers should be assured that we will go further to make it more relevant and meaningful to how we serve them day to day. We continue to believe that running a bank on co-operative values is more relevant today than ever and we are determined to prove to customers that if they believe in those values and ethics we should remain their bank of choice.”
Tony Langham – 07979 692287
David Masters – 07825 427514
The Co-operative Bank:
Alice Hunt – 07834 620704