Co-op to cut ties with bank as it sells final stake
THE Co-operative Group has revealed it no longer holds any stake in the Co-op Bank business after offloading its 1 per cent holding.
The mutual had been left with just 1 per cent after a £700million rescue and refinancing deal to get Co-op Bank back on track was completed weeks ago, but confirmed it has now sold the last remaining stake for about £5million in the last few days.
It leaves the pair with just a relationship agreement, which will also fall away over the next few years and end formally in 2020. Details of the stake sale came as the Co-op Group posted a 48 per cent fall in underlying pre-tax profits to £14million for the six months to July 1 after shelling out £35million in member rewards and after losses at its insurance arm. On a bottom-line basis, profits rose 47 per cent to £25million.
The figures come weeks after Co-op Group emerged as the front-runner to buy convenience store operator Nisa, muscling out rival bidder Sainsbury’s.
In its half-year results, the Co-op Group said its insurance business swung to an underlying operating loss of £1million against profits of £11million a year earlier as it increased reinsurance through third parties.
On a reported basis, it saw operating losses widen to £11million from £4million a year ago.
But the group hailed its 14th quarter in a row of rising sales at Co-op Food, with like-for-like growth of 3.5 per cent in its first half.
Convenience store like-forlike sales rose by 4.5 per cent.
It said underlying operating profits from the food business jumped by 3 per cent to £65million and 22 per cent higher on a reported basis.
Steve Murrells, group chief executive of the Co-op, said the group “continued to perform in the face of challenging markets”. He added: “Across our business we are also maintaining our commitment of reinvesting for the future success of our Co-op.”