Co-operative bank plc (LON:CPBB) has listed itself for sale in a bid to raise funds, after warning that it may not be able to fulfil capital requirements of UK regulators.
The bank announced on Monday that it intends to invite investors to bid for the remaining shares of the company in order to raise capital. As of currently, 20 percent of the bank is owned by the Co-operative mutual.
The Co-op Bank said it was also “considering other options to build capital” to bring its finances in line with UK regulator requirements. Other alternatives being considered include restructuring of debts or raising capital from existing investors. Nevertheless, Co-operative Bank said it had seen “considerable progress implementing its turnaround plan, with a customer-focused retail bank being rebuilt”.
In 2013, the bank was rescued by various US hedge funds after the organisation almost went bust when it was discovered that the bank needed £1.5 billion in funding in order to remain afloat.
The bank’s chief executive, Liam Coleman commented:
“Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition.
“The Co-operative Bank delivers an attractive banking proposition that is differentiated by our values and ethics and is highly valued by our 4m customers. Customers value the Co-operative Bank and our ethical brand is a point of difference that sets us apart in the market.”
The bank also added that it had resolved prior issues relating to the misspelling of payment protection insurance (PPI), a scandal that has affected many major UK banks including Lloyds (LON:LLOY).
The bank’s chairman Denis Holt, said the bank still remained inline with its capital requirements as stipulated by the Bank of England’s Prudential Regulation Authority.
“At the same time, since we began work on the Bank’s turnaround, the board has always been clear that we would need to build capital for the future. 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,” commented Mr Holt.
This follows the bank’s warning over its capital reserves issued last month. The bank is expected to make a loss for the financial year.