Co-op Bank: We have no shortage of bidders
CO-OP Bank attempted to calm nerves about its future today by claiming that interested bidders were circling and that it could survive without a full takeover.
The bond market is indicating that the bank is in serious trouble, with top-level debt in the business changing hands for a fraction of face value — 40p in the pound in some cases.
A date of April 4 has been set for offers to emerge, though the bank says this is not a final deadline.
With markets jittery and press criticism growing, it said: “A number of credible strategic and financial parties have expressed an interest in the sale process and are currently evaluating information on the bank.”
The Co-op says it will now proceed to a “second phase” of the sales process, where “selected parties will be provided with additional information”. The bank is 30% owned by the wider Co-op Group, and US hedge funds own much of the remaining 70%.
It has run up losses of £1 billion in the past two years and needs capital to boost its balance sheet. It says that capital could come from existing share and debt holders.
Various possible bidders have publicly ruled themselves out, including TBS owner Banco Sabadell and Secure Trust Bank.
The Co-op Bank failed a Bank of England stress test in 2014. It has been eyed nervously by regulators ever since.
The Bank reported an annual loss of £477 million earlier this month.
The Bank of England is said to have made plans for an “orderly failure” of the Co-op Bank should rescue plans not materialise. @SimonEngStand