The reputation of the UK’s Co-operative Bank is in tatters. Has it also bankrupted the whole cooperative movement’s credibility?
One customer of the UK’s beleaguered Co-operative Bank recently tweeted: “Obviously one can no longer pull the smug ‘I bank at the Co-op’ face but I remain stalwart in my love.”
It is an open question how many other customers feel similarly. Enough current account customers have jumped ship since the bank started to hit the headlines for the wrong reasons for it to make a statement to investors, admitting with supreme understatement that recent events “may have caused some brand and reputational damage”.
What is not clear is whether large numbers of customers are leaving because they feel their ethical values have been betrayed, or because they fear that the bank may be sinking and they worry it might take their money with them.
The latter eventuality became less likely with the high profile rescue measures, with a deal being agreed for a £1.5bn bailout – at the cost of handing 70% ownership of the bank to hedge funds. But for some this is the central point because, they assume, it is not possible to continue to be taken seriously as an ethical bank if owned by people that will push for higher profits and shareholder returns.
In response to such concerns,...