The Financial Times is watching the Co-operative Bank closely. Today it reported that Niall Booker has been appointed as the new head of the bank and also ‘deputy chief executive of the lender’s parent group’.
Some query the fact that he left the HSBC in 2011 and has been ‘out of work’ since then – and also lacked recent UK-specific leadership experience.
Does Niall Booker have the right mindset?
Concerned co-operators have been wondering if Mr Booker will understand and practice the principles of co-operation as set out in several documents. Even if ‘inducted’ at the Co-operative College could that overturn so many years in which he has been conditioned to make profit the primary consideration and not the interests of the members who are said to own and control all co-operatives?
A few days ago The FT pointed out that In March the Co-operative Bank “quietly hung the “closed to new business” sign over its corporate banking operation”.
It continued to service existing business customers but turned away new ones as it worked to conserve capital and to comply with tighter regulatory requirements. “It was a strategic decision. We didn’t shout about it,” says a bank spokeswoman.
Other observations included a summary of the acquisition of the Britannia building society in 2009. According to Barclays analysts, it was said to have:
- inherited bad loans inherited from the Britannia – only half of its corporate loans are ‘performing’
- acquired Britannia’s assets at only 5% per cent discount
- and failed to fully integrate IT systems with Britannia.
The future: retail expansion – but first surely stabilisation and consolidation?
The Co-op said on Friday it had decided that the bank should focus on retail expansion. Euan Sutherland, the new chief executive of the Co-operative Group, described as ‘the bank’s owner’, said: “This decision is part of our commercial strategy to play to the traditional strengths of the bank. It will enable us to focus our energies and capital on both supporting our existing corporate customers and on growing our presence in the retail banking market.”
The Treasury select committee is expected to look at the Co-op in the coming months, according to ‘a person with knowledge of the situation’.