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Co-Op Bank Stops Lending To New Corporate Clients

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http://uk.reuters.com/article/2013/05/24/uk-co-op-bank-lending-idUKBRE94N07320130524

The Co-operative Bank has stopped offering loans to new business customers, part of measures designed to quell growing concerns over its capital position.

A spokesman for Britain's biggest customer-owned financial services business said it would continue to provide lending to existing customers. The freeze does not apply to individual retail customers.

"We are not offering new loans to new corporate customers but are continuing to provide facilities for existing customers," he said.

Another indication that the Co-op might be in a bit of difficulty?

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http://uk.reuters.com/article/2013/05/24/uk-co-op-bank-lending-idUKBRE94N07320130524

Another indication that the Co-op might be in a bit of difficulty?

It already is in difficult. In such situation, using the precious capital to lend to the high provision RWA type of loan is silly.

Vince is going to hate it - but they can have both safer bank and lots of lending - small biz are ideally funded via Angles and love money.

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It already is in difficult. In such situation, using the precious capital to lend to the high provision RWA type of loan is silly.

Vince is going to hate it - but they can have both safer bank and lots of lending - small biz are ideally funded via Angles and love money.

FT re Co-op hitting the brakes to new client business lending... What about the lovely growth out there, achieved without no bust?

The move is a blow to government efforts to reverse a decline in lending to small businesses as larger banks struggle to recover from near-collapse in the 2009 financial crisis.

By Angels? Their brand new super-bling HQ is 1 Angels Square. http://www.manchestereveningnews.co.uk/business/property/co-operative-groups-one-angel-square-3571345

Thankfully it seems they're only renting it, but from what I could tell, guaranteed inflation rental rises during the first 25 years they've signed up for.

http://www.freeofficefinder.com/officemarketnews/rreef-to-buy-the-co-op%E2%80%99s-new-head-office-in-manchester-for-142m/

PDF http://www.oneangelsquare.co.uk/dl/brochure.pdf

Securely let to the co-operative group holdings (2011) Limited, with lease obligations guaranteed by The Co-operative

group limited. 25 year inflation-linked lease expiring in 2037. 5 yearly upward only rental uplifts to the CPI (Consumer Price

Index) with annual collar and caps of 1.5% and 4% compounded. Initial rent of £9,000,000 per annum reflecting an average rent of

£26.15 per sq ft (£281.45 per sq m), excluding cars.

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Lots of job losses coming if they aren't lending to anyone new.

What business would bother opening an account there now if they are barred from lending?

The shiny new office will end up being empty soon enough.

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Quarter of their loan book effectively now in run-off.

Looks like they're exiting corporate altogether.

They appear to be in some pretty serious difficulty.

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Lots of job losses coming if they aren't lending to anyone new.

What business would bother opening an account there now if they are barred from lending?

The shiny new office will end up being empty soon enough.

...shiny new offices are always a bad sign ...especially when their due diligence on The Britannia BS could not have been carried out with the awareness necessary of the BS portfolio in 2009...all sounds a bit naive.....how can errors like this be made .?....were they encouraged by external factors/ bodies /forces ..?..... :rolleyes:

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Looks like the Manc bank is gonna tank.

The last bloke got distracted by all that lovely corporate moolah that appears to vanished like a Chelsea manager after 2 defeats in a row.

Sooner Co-op gets back to its roots the better.

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http://uk.reuters.com/article/2013/05/24/uk-co-op-bank-lending-decision-idUKBRE94N0HV20130524

The Co-operative Group said on Friday it had decided to freeze lending by its banking division to new corporate customers in March to focus on existing customers and individual retail customers.

"This decision is part of our commercial strategy to play to the traditional strengths of the bank," said Chief Executive Euan Sutherland. "It will enable us to focus our energies and capital on both supporting our existing corporate customers and on growing our presence in the retail banking market."

So decided 2 months ago.

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http://uk.reuters.com/article/2013/05/24/uk-co-op-bank-lending-idUKBRE94N07320130524

Another indication that the Co-op might be in a bit of difficulty?

not necessarily,they might actually be living up to their name.

CO-OPERATIVE(where everyone who works in it has a stake) versus corporate(where only those at the very top do).

I'm all for quaker-style capitalism.

the cadbury's and rowntrees of this nation are the people that built the country,and they realised somewhere along the line that the people making it happen were actually worth something.

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sheeesh...they bargained hard there.

It's not quite as bad as I first thought.

Some more of the much-loved by some members here, 'spend on top of epic debt on whatever project for prosperity' tax-payer stimulus was kicked into it.

Co-op obviously deserving of council funding over a non-political entrepreneur, which some people have no problem with at all. And whoever owned the site possibly then getting more towards 'what it is worth' when they sold it, with the extra £20m contribution. Probably thinking about Co-ops overall £800 million NOMA project. Sure nobody is going to be affected by their restricting new lending. :rolleyes: Know of some low-ball offers being made on existing com-props. Even Gary Neville is getting in on it, although we'll see how his plans work out.

The purchase is the latest addition to Neville's already extensive property portfolio - which include a restaurant and soon-to-be built hotel. Previous owners MCR Property Group put it on the market last December for £1.5m - a fraction of the price it last sold for in 2004 when it was valued at £4.7M.
The Co-operative Group, who have been based in the Manchester area since their inception in 1844, hope the development will attract more companies to invest in Manchester as they have done and continue to do. The development involves the creation of 4,000,000 square feet of office, residential, retail and hotel space with the NOMA name taking inspiration from NOrth MAnchester.
The building cost at least £105 million to construct and was sold on leaseback terms in 2013 for £142 million.

In 2011 the Co-operative announced the NOMA project, north of Manchester city centre, to regenerate a 20-acre site with office, retail, residential and hotel space to encourage visitors from the city centre. Manchester City Council contributed £20m to the project as an incentive for redevelopment.

In July 2012, the Co-operative Group announced One Angel Square was on the market for £150 million on leaseback terms so it could gain capital to invest in Phase Two of the NOMA development.[34] In February 2013, the Group sold the building for £142 million to RREEF Estates, the property investment arm of Deutsche Bank and Ginko Tree Investments, an investment arm backed by the Chinese sovereign wealth fund.

http://en.wikipedia....ne_Angel_Square

Edited by Venger

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Barclays and Lloyds are Quaker businesses.

Quakers were a bit like the Jews - outcast and were therefore very entrepreneurial and entered unseemly professions like money lending.Their widely recognised high moral standards stood them in good stead in business due to the essence of TRUST.

They may have started that way, but they are now just huge corporations with shareholders like all other huge corporations.

If you think Lloyds and Barclays are still run in accordance with the ethical beliefs of Quakers, you have not been paying attention for the past 10 years or so.

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Troubled lender Co-operative Bank has appointed a former HSBC banker as its new chief executive.

'Niall Booker, the former head of HSBC's North American operations, will take over at Co-op as it faces questions over its capital position.'

That will be the HSBC, and the North America, if people need reminding, that acknowledged that HSBC's corruption was so systemic, complete and global, that the US authorities 'could not' prosecute it, AKA Too Big To Jail.

The US regulator admitted - indeed, unguardedly gloated, that prosecution of HSBC would inevitably mean that HSBC would lose it's licence to operate in the US, which would in turn bring the world's entire banking system down.

At least it solves my dilemma as to whether or not I should bank with an ethical bank like the Co-Op, even if it backs a political party.

I don't think I will pretend to myself that the Co-Op's future will be ethical.

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I don't think I will pretend to myself that the Co-Op's future will be ethical.

I don't consider its boom-time recent past to have been, on a few key decisions for expansion.

Everyone must be tired at my complaints that forbearance has allowed too many older business managers and business owners at over-extended companies to still remain at the top, making decisions, drawing big incomes and benefits, whilst blocking opportunity for younger smarter workers.

I didn't anticipate the same people left in power would commit more huge risk to capital position and health of a business by further grandeur over-extending projects. The new HQ and rest of the NOMA project looking that way, from my initial overview.

Historically, however, when a company becomes preoccupied with the grandeur of its premises, it often signals a high point in its fortunes. These fantastical buildings may end up as little more than costly monuments to vanity and a loss of focus on the core business that made for success in the first place.
The Co-op is considering clawing back bonuses awarded to former executives in the run-up to the crisis in its banking arm.Sources said the Co-op’s new group chief executive Euan Sutherland is looking at whether clawbacks of past bonuses are appropriate. It is not known which executives may be in line to forfeit their payouts.

http://www.thisismoney.co.uk/money/news/article-2331309/Co-ops-capital-shortfall-results-new-boss-deliberating-clawback-senior-bonuses.html

Hmm I don't think they've got the nerve to try it, and they are unlikely to acquire it overnight, even with the HSBC guy. Too much of a culture shock, unless younger lower management have been uneasy about upper management decisions in recent years, and recognise the real need to right things.

Oh but look how hard the former Co-op shelf-stacker worked in the deals to acquire Sommerfields, Britannia, and Project Verde for all those hundreds of Lloyds branches. Yeah Marks.. way to leave everything at Co-op for the next generation of younger workers coming through. Really good shape. Add the £400K+ bonus to all the others.

http://www.guardian.co.uk/business/2012/aug/07/co-operative-group-peter-marks-retires

Peter-Marks-who-is-to-ret-008.jpg

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Sorry - did I miss the point of what the Co-operative society (effective parent of the bank) and Britannia building society were created to do in the first place.

They were never supposed to fund corporate interests - so back to basics one might say!

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23 May 2013

Perhaps Peter Marks, the departing chief executive of the Co-op, could not attend the group’s annual meeting at the weekend because he didn’t have the right outfit.

Marks, who retired on Saturday, famously gloated that he had ‘taken the shirt off’ Lloyds boss Antonio Horta-Osorio with the Co-op Bank’s £350m deal to take over more than 600 branches.

But the collapse of the Project Verde deal earlier this month means sackcloth and ashes would be more appropriate garb for Marks, who failed to show up at his swansong event to face questions over the abortive acquisition.

The downfall of the Verde deal leaves the Co-op Bank in a parlous state with an as yet unquantified black hole in its capital, a vacuum at the top in terms of a permanent leader, a flawed IT system and hundreds of millions of pounds of toxic assets.

http://www.thisismoney.co.uk/money/markets/article-2329738/CITY-FOCUS-Co-op-boss-Peter-Marks-leaves-bank-lurch.html

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Their preference shares are down around 80p so think of this as an opportunity to lock in an 11.5% yield. <_<

Or alternatively buy the 13% Co-op Subordinated Bond ( This is the ex Britannia BS 13% PIB ) - Price has fallen 4.5p to 84.5p today to yield 15% pa

Excellent Article from Oliver Butt of FixedIncomeInvestor.co.uk.

Just when you are sitting back in your chair thinking there are no interesting bonds left, just as you watch the blossom burst forth through the window and think all is done for the summer, along comes Co-op Bank to offer you an opportunity. But should you take it?...

Continues here

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http://uk.reuters.com/article/2013/06/12/uk-britain-coop-idUKBRE95B09D20130612

Britain's Co-operative Group needs to be made more resilient after the bank's surprise credit rating downgrade recently, a senior Bank of England official said on Wednesday.

Andrew Haldane, Bank director of financial stability said Co-op's situation was "plainly difficult."

He's had quite a lot to say today.

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I relieved Co-op of my savings yesterday, I doubt it'll make the difference between sink or swim...

But I presume everyone else is moving funds out on the quiet. Their retail savers must be deserting them quickly.

Seems only a matter of time before they admit they're screwed, based on recent experiences with other banks.

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I relieved Co-op of my savings yesterday, I doubt it'll make the difference between sink or swim...

But I presume everyone else is moving funds out on the quiet. Their retail savers must be deserting them quickly.

Seems only a matter of time before they admit they're screwed, based on recent experiences with other banks.

Interesting times.

Edited by TheCountOfNowhere

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This is about the Co-Op Group, rather than Co-op Bank itself.

Beleaguered Co-op lavishes £1MILLION on helping senior executive move house including £200,000 in relocation costs alone
12 June 2013

http://www.thisismoney.co.uk/money/news/article-2340596/Beleaguered-Co-op-lavishes-1MILLION-helping-senior-executive-house-including-200-000-relocation-costs-alone.html

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  • 242 Brexit, House prices and Summer 2020

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      • down 5% +
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