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Key messages

 

  • On Monday 13 February, we announced that we are beginning a process to sell the Bank and also consider other options to rebuild our capital position.
  • This is about the best route forward to deliver the next phase of the Bank's turnaround plan.
  • We currently meet, and expect to continue to meet so-called Pillar 1 capital requirements, which is the highest quality capital available to a bank.
  • The Bank needs to build its capital due to a number of factors, which have changed since we launched our turnaround plan, including much lower for longer interest rates and greater than expected costs of addressing the legacy issues of the past.
  • No outcome has been decided yet and a sale is, of course, dependent on agreeing an offer that is right for our key stakeholders, including customers.
  • Considerable progress has been made in implementing the turnaround plan since 2013.
  • The majority of our legacy issues have been addressed and a strong retail bank is being rebuilt.
  • Over the weekend of the 11-12 February, we successfully migrated our mainframe banking systems to our partner IBM, which marked a major milestone on our journey to turn the Bank around.
  • This announcement does not affect the products customers hold with us, or the service we provide.
  • We thank customers for their continued support and loyalty.

Q1. What does this mean for me as a customer?

  • We understand that media coverage can be unsettling, however, this announcement does not affect the products you hold with us or the service we provide. We remain committed to providing excellent customer service for our 4 million valued customers.  
  • The decision to embark on a sale process and look at other ways of rebuilding our capital position has been taken very carefully.
  • This is about the best route forward to deliver the next phase of the Bank's turnaround plan. We currently meet, and expect to continue to meet so-called Pillar 1 capital requirements, which is the highest quality capital available to a bank.
  • We believe there is great value in our distinct position in the market and that the relationship we have with customers, centred on our values and ethics, sets us apart and remains a key reason why customers choose to bank with us.

Q2. Why are you selling the Bank?

  • The decision to embark on a sale process and look at other ways of building capital has been taken very carefully.
  • This is about the best route forward to deliver the next phase of the Bank's turnaround plan. The Bank needs to further build its capital position due to a number of factors, which has changed since we launched our turnaround plan, including much lower for longer interest rates.
  • We currently meet, and expect to continue to meet so-called Pillar 1 capital requirements, which is the highest quality capital available to a bank.
  • We are just starting the process, and a sale is dependent on agreeing an offer that is right for our key stakeholders, including customers.

Q3. Who will you sell to?

  • No outcome has been decided yet and a sale is, of course, dependent on agreeing an offer that is right for our key stakeholders, including customers.
  • This is about the best route forward to deliver the next phase of the Bank's turnaround plan.

Q4. Is the Co-operative Bank safe as internal and external factors seem so challenging?

  • The macroeconomic outlook is challenging for all banks, and the recent base rate cut means lower for longer rates.
  • This creates a more challenging income environment for banks generally, including the Co-operative Bank.
  • We have made significant progress and improvements in turning the Bank around from the position it was in 2013.
  • Very importantly, we currently meet, and expect to continue to meet so-called Pillar 1 capital requirements, which is the highest quality capital available to a bank.

Q5. Is your turnaround plan really working?

  • The bank is much stronger than it was. We have made considerable progress to address legacy issues we inherited in many areas, and made the Bank more resilient overall.
  • Only this weekend, we successfully migrated our mainframe banking systems to our partner IBM, which marked a major milestone on our journey to turn the Bank around.
  • We have worked hard to rebuild our retail banking proposition, differentiated by our values and ethics and strong customer service, which we know is valued by our customers.
  • However, like all banks, we are not immune to uncertainty in the macroeconomic environment.
  • The latest economic forecasts show that interest rates will remain lower for longer than previously anticipated and this will create a more challenging income environment for banks generally.

Q6. Is my money safe?

  • Yes, customers’ money is safe, and this announcement does not affect the products customers hold with us, or the service we provide.
  • Very importantly, we currently meet, and expect to continue to meet so-called Pillar 1 capital requirements, which is the highest quality capital available to a bank.
  • This is about the need to further build our capital position due to a number of factors, which has changed since we launched our turnaround plan, including much lower for longer interest rates.
  • Like all banks, customers are protected by the Financial Services Compensation Scheme (FSCS), an in institution which covers customers of all banks for up to £85,000 of retail deposits.

Q7. I have seen lots of media coverage about the Bank. Should I close my account? 

  • We accept that analysts and journalists will have different opinions on the Bank’s turnaround given the complexity of the challenges the Bank faces.
  • We have made significant progress and improvements from the position the Bank was in of 2013, and the announcement today is about the best route forward to preserve our ethical proposition for customers and to build our capital position. We have worked hard to rebuild our retail banking proposition, differentiated by our values and ethics and strong customer service, which we know is valued by our customers. We have made considerable progress to address major legacy issues we inherited in a number of areas and made the Bank more resilient overall.
  • This announcement does not affect the products customers hold with us and the service we provide.
  • We thank customers for their continued support and loyalty.

Q8. Why should I stay as a customer?

  • The Co-operative Bank has a valuable role to play in providing customers with a different choice in the market, set apart by the values and ethics that remain a key reason why customers choose to bank with us.
  • Ensuring that these continue to sit at the heart of the Bank is vital and we are delighted to be celebrating the 25th anniversary of our customer-led Ethical Policy during 2017.
  • We have worked hard to rebuild our retail banking proposition, differentiated by our values and ethics and strong customer service, which we know is valued by our customers. We have made considerable progress to address major legacy issues we inherited in many areas and made the Bank more resilient overall.
  • Today’s announcement is about finding the best route forward to preserve our ethical proposition for customers and to build our capital position.

Q9. When will the Bank be profitable again?

  • We have always been clear that the journey to reshape our business would take time and there is still much to do.
  • We are not saying anything else about profitability at this time.

Q10. What will happen to your staff?

  • It is too early to say precisely what the impact on our colleagues will be. We are committed to keeping colleagues and customers informed of any material changes that will affect them, when this becomes clear.