Co-op Bank escapes fines for past failings
The Co-operative Bank will not be fined for failings that helped push the bank to the brink of collapse before it was bailed out by bondholders, Britain's financial regulators said, arguing that capital should be preserved to bolster its balance sheeet.
The censure for serious risk management and transparency failings will be particularly embarrassing for the 143-year old bank, which had built its reputation around its ethical credentials.
Co-op Bank is trying to recover from its near-collapse in 2013, when it was hit by a yawning hole in its finances, a drugs scandal, an exodus of top executives and losses from bad commercial real estate loans.
The crisis saw bondholders take control of the bank, with its long-time owner, the mutual Co-operative Group, relegated to a minority holding.
Co-op Bank was the only British lender to fail a UK banking stress test in December and has agreed a plan with the regulator to bolster its capital strength.
The Financial Conduct Authority (FCA) issued a public censure against the bank for breaching listing rules that require companies to ensure published information is not misleading, allowing investors to make fully informed decisions.
The FCA, which undertook the 18-month investigation into the actions of former management and the 2009 merger with the Britannia Building Society, also found that Co-op Bank fell short of its responsibility to be open with its regulators, one of the principles that regulated firms must abide by.