Co-opting scale

13 February 2017 By Dominic Elliott

The troubled UK lender has put itself on the block despite saying it is short of capital. Viewed generously, the underlying Co-operative Bank might be worth 200 million pounds. But any scale-hungry peers would have to overlook legacy problems that militate for a discount.

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UK should stop dithering over Co-op

Context News

Britain's Co-operative Bank on Feb. 13 put itself up for sale and said it had made considerable progress implementing its turnaround plan, cutting its cost base by a fifth since 2014.

“The board is today commencing a sale process, inviting offers for all of the issued ordinary share capital in the bank,” the lender said in a regulatory statement.

The Bank of England's Prudential Regulation Authority, which regulates Co-operative Bank, said it welcomed the measures announced on Feb. 13.

"We will continue to assess the bank’s progress in building greater financial resilience over the coming months," the PRA said in a statement.

Last month, the bank said it expected its core capital ratio to fall below 10 percent "over the medium term" and that it would probably fall short of its own individual regulatory requirements until 2020.

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