The Co-operative group will lose control of the Co-operative bank under a new rescue deal
If you’re with the Co-op bank, what does it mean for you and your money?
To say the Co-operative bank has been on a rollercoaster over the last few months is an understatement. This week it announced it had reached a new bailout agreement. Instead of small investors who’d bought Co-op bank bonds bearing the brunt of the pain, Co-operative Group would reduce its stake in the bank to just 30%. What could it mean if you have an account with the Co-op?
The warning that, "Past performance is no guide to future results", which appears under every investment advert in the UK, has never been more true. Our rapidly transforming world faces a perfect storm of rising demand for food, energy, living space and water, while also dealing with climate change. And these forces mean investors cannot rely on a rear-view mirror to invest their money.
The Co-op bank will swap some of its bonds for shares to plug its financial hole
The Co-op bank won’t get any money from taxpayers, but some people who invested in the Co-op could lose out
Co-operative bank announced its restructuring plans, designed to plug a £1.5 billion hole in its finances. It’s already announced that it will sell off its general insurance arm and that it won’t lend money to new business customers. Now it’s going to convert some bonds into shares. These are corporate bonds (essentially loans to Co-op bank) taken out by large investment companies and pension funds and are not the same as savings bonds. However, some individuals also bought them.