Newspaper article Manchester Evening News

'Britannia Behind Co-Op Woes'

Newspaper article Manchester Evening News

'Britannia Behind Co-Op Woes'

Article excerpt

A TOP City regulator has insisted the Britannia Building Society''s risky loan book was and is a "key factor" in the Cooperative Bank''s mounting woes.

Andrew Bailey, chief executive of the Prudential Regulation Authority, wrote to MPs to say a big part of a Pounds 1.5bn black hole in the Co-op''s balance sheet stems from the former building society''s risky assets.

Mr Bailey''s letter to Andrew Tyrie, chair of the Treasury Select Committee, follows evidence from former Britannia boss Neville Richardson earlier this month, when he insisted the building society was a success when it was taken over by the Co-op in 2009.

MPs are probing the collapse of the Co-op''s attempt to buy more than 630 branches from Lloyds Banking Group in April, dubbed Project Verde.

It later emerged the Co-op Bank needs to find Pounds 1.5 bn of capital, which the customerowned group is attempting to plug by forcing losses onto bondholders.

Mr Bailey said while Britannia is not solely to blame for the bank''s problems, the building society''s assets are behind more than half the bank''s total loan losses of Pounds 970m between 2012 and the end of June 2013. …

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