Co-operative Bank ends sales talks to focus on capital raising

Co-op Bank

The Co-operative Bank has ended sales talks but is still negotiating to increase its capital reserves.

The lender today said it was in “advanced discussions” with existing investors to secure the extra cash.

A Co-operative Bank statement adds the firm’s board has “decided to discontinue the formal sale process under the takeover code”.

The Co-operative Bank says the extra capital would let the bank meet its long-term capital requirements and mean a sale is unnecessary.

The lender says it will struggle to meet these requirements due to high interest rates and “higher than anticipated transformation and conduct remediation costs”.

The lender had previously been courted by firms such as Santander, Virgin Money and Banco Sabadell, though both pulled out of sales talks.

The Co-operative Bank’s large investors include Blue Mountain, Co-operative Group, Cyrus Capital Partners, GoldenTree Asset Management and Silver Point Capital.