After near-collapse, the Co-op Bank faces an uphill struggle to rebuild both its financial credibility and its reputation as a leader in ethical business
The UK’s Co-operative Bank is still in a tight spot. The fallout from the 2013 near-collapse of the bank – through poor leadership and unwise investment decisions that led to a £1.5bn bailout, which handed 70% of the bank’s shares to hedge funds – has continued to hit the bank’s performance and its reputation.
A further £400m of fundraising has meant the Co-operative Group’s holding in the bank has shrunk to just 20%. Fighting back, the bank has appointed Laura Carstensen as the new chair of its values and ethics committee. Carstensen is a member of the UK’s Equality and Human Rights Commission, and will sit on the bank’s board as a non-executive director. She was previously a partner at London law firm Slaughter & May, and deputy chair of the Competition Commission.
The bank is also polling its 4.5 million customers on its ethical practices, including the sectors in which the bank should not invest. This is not the first time such a review has been undertaken. The bank’s ethical policy was created in 1992 and has been reviewed four times since “to make sure it remains relevant and in line with our customers’ views”, the bank says.