Co-operative Bank up for sale

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Co-operative Bank is up for sale and has invited bids for all its shares.

The bank wants to sell to increase its capital reserves to meet regulatory requirements.

A stock exchange announcement today says: “The bank has always been clear that, although it meets its Pillar 1 regulatory capital requirements and expects to continue to do so, it needs to build its capital and meet longer term UK bank regulatory capital requirements.

“Its capacity to do so organically has been constrained by the impact of interest rates that are lower than previously forecast, reducing the bank’s ability to generate income, and by higher than anticipated transformation and conduct remediation costs.

“The Bank has also needed to consider enhanced regulatory capital requirements expected of all UK banks, including MREL requirements.”

The bank is also considering ways to raise equity capital, as well as a potential liability management exercise of its outstanding public debt.

Co-operative Bank has hired BofA Merrill Lynch and UBS Investment Bank for those jobs.

Co-operative Bank chairman Dennis Holt says: “We are now commencing a sale process, alongside other options. The Bank’s ethical heritage and customer proposition will be a central consideration in this.”