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spyguy

Good Old Co-Op Bank

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blah blah mis-selling, blah blah raise more capital

http://www.bbc.co.uk/news/business-26711709

'For example, the bank has concluded that in some cases, where it put cash-strapped holders of mortgages into forbearance, so that they did not have to pay the full cost of their mortgages for a period, it did the wrong thing - because these customers were in such dire straits that keeping them in their homes may have prolonged the agony.

Or to put it another way, it would have been kinder and fairer to repossess, because in the years of forbearance the deferred interest costs became bigger and bigger.'

Who'd have thought it. Forbearance benefits the bank.

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Can't decide whether the BoE knew this all along and have effectively suckered Perry Capital, or whether Perry Capital knew this from their due diligence and have suckered the Coop group.

Either way someone somewhere has been sold a crock of sh1t.

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The implosion of the co-op has been spectacular: the downgrade of the bonds, the Reverend Paul Flowers scandal, and now the miscalculation of liabilities.

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Can't decide whether the BoE knew this all along and have effectively suckered Perry Capital, or whether Perry Capital knew this from their due diligence and have suckered the Coop group.

Either way someone somewhere has been sold a crock of sh1t.

From the article the hedge funds can raise the additional capital but co-op group may not be able to so their shareholding will get diluted. Not sure of the strategy but the hedge funds I guess will wrestle control.

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blah blah mis-selling, blah blah raise more capital

http://www.bbc.co.uk/news/business-26711709

'For example, the bank has concluded that in some cases, where it put cash-strapped holders of mortgages into forbearance, so that they did not have to pay the full cost of their mortgages for a period, it did the wrong thing - because these customers were in such dire straits that keeping them in their homes may have prolonged the agony.

Or to put it another way, it would have been kinder and fairer to repossess, because in the years of forbearance the deferred interest costs became bigger and bigger.'

Who'd have thought it. Forbearance benefits the bank.

Indeed. Of course, the deferred interest etc may as well be telephone numbers as in many cases it cannot be repaid without extraordinary reversals of fortune for some of the worst cases. It would be in everyone's best interest to repossess and pursue bankruptcy for a shortfall, write off the residual and move on.

But, approaching 7 years after Lehmans, here we are, circa 8% of UK mortgages in some sort of forbearance, no reason to expect that Co-Op's mistakes are not repeated elsewhere. What a mess.

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No Treasury interference, according to Osborne.

Chancellor George Osborne has said the Treasury did not press for a deal for Co-op Bank to buy 632 Lloyds branches.

In a letter to the Treasury Select Committee, Mr Osborne said the deal "was a matter for Lloyds and the-then regulator, the FSA".

The former chairman of Co-op Bank, Paul Flowers, and Lord Levene have both accused the Treasury of interfering.

Also, a report by Newsnight said the Treasury argued with regulators about a law that could have blocked the bid.

The chancellor has been answering questions about the Co-op issue at a hearing of the Treasury Select Committee.

Labour MP Pat McFadden said the committee had heard "conflicting advice on whether there was political pressure", citing testimony from Lord Levene, who was leading a rival bid.

In written evidence submitted in January, Lord Levine wrote: "We had contacts with senior banking figures, during which it was made clear to us that pressure on LBG [Lloyds] to appoint the Co-op was coming from within the Coalition."

But the Chancellor denied there had been an attempt to interfere in the process.

Osborne: No Treasury pressure on Co-op over Lloyds deal

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"His departure is another significant blow for the business, which is facing losses of up to £2bn."

Do they mean facing 2bn losses or facing bankruptcy ?

Too small to bail ?

Cue the queues....

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"His departure is another significant blow for the business, which is facing losses of up to £2bn."

Do they mean facing 2bn losses or facing bankruptcy ?

Too small to bail ?

Cue the queues....

They need to raise capital but the corporate governance needs to be reformed To do this.Politically they can't nationalize it. Looks like there is behind the scenes action going on hence delays.

Edited by Ash4781

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They need to raise capital but the corporate governance needs to be reformed To do this.Politically they can't nationalize it. Looks like there is behind the scenes action going on hence delays.

I'd be surprised if anyone had their savings with them ?

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Lord Myners == Bailout Man. Perhaps he thinks it would be inappropriate to run a bailout while he's on the board of the bank?

Not of course that there's any question of a bailout. Osbrown isn't .... oh, hang on ....

Edited by porca misèria

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Lord Myners == Bailout Man. Perhaps he thinks it would be inappropriate to run a bailout while he's on the board of the bank?

Not of course that there's any question of a bailout. Osbrown isn't .... oh, hang on ....

Has there been an official announcement that there is no need to panic ?

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I'd be surprised if anyone had their savings with them ?

I don't have major savings with them, but I do have my main current account with the Co-op. I've been with them for over 20 years and have been generally happy with their service, but I've got to admit I'm getting a bit twitchy now. Shifting a current account is quite a bit of hassle though. :(

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I don't have major savings with them, but I do have my main current account with the Co-op. I've been with them for over 20 years and have been generally happy with their service, but I've got to admit I'm getting a bit twitchy now. Shifting a current account is quite a bit of hassle though. :(

I thought current account switching was zero hassle these days....the new bank does all the set up for you. The only hassle you might have is if you are in debt ( i.e. over-draft ) to the bank, debt's never a good thing.

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£1.3bn in losses this time with years of red ink yet to come.

Another City success. :D

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10759396/Co-operative-Bank-expects-years-in-the-red-after-1.3bn-loss.html

The Co-op Bank has confirmed it made a loss of £1.3bn last year and will remain loss-making for the next two years as the troubled lender published its twice delayed annual results.

The lender said it had begun talks on a £400m fund raising and warned that without the new money it would be in breach of its minimum capital requirement.

Niall Booker, chief executive of the Co-op Bank, apologised for the situation and said the lender would be clawing back about £5m in bonuses from former directors and executives due to the failings.

“We appreciate that customers and other stakeholders continue to feel angry about how past failings placed the future of the business so seriously at risk. I would like to apologise to them, to thank them for their continued loyalty and to thank colleagues for their commitment during such difficult times," he said.

‎Mr Booker received total pay for 2013 of £1.73m after being appointed to the job last June. In addition to a salary of £669,000, he also received a £140,000 monthly "allowance" based on what the bank said was "the broad range of specialist skills required" in his job. ‎On a 12-month basis, this would equate to a pay package for Mr Booker this year of more than £2.5m.

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£1.3bn in losses this time with years of red ink yet to come.

Another City success. :D

£400mn fund raising lol...............:o.

Dutch boy,finger,dyke.

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To be fair I don't think they are city. Well they maybe soon be if the co-op group does not stump up part of the additional capital. They are forecasting future losses and Myners mentioned the big problems in corporate governance at the group.

I expect the boe and treasury are closely monitoring.

Edited by Ash4781

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To be fair I don't think they are city. Well they maybe soon be if the co-op group does not stump up part of the additional capital. They are forecasting future losses and Myners mentioned the big problems in corporate governance at the group.

I expect the boe and treasury are closely monitoring.

I wouldn't be so sure Ash.

Experience tells us that a loan book that's haemorraghing capital in these calmer ZIRPed up/QE times is likely sat on an absolute crock of doo doo.

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An ex of mine owed them over £40k in loans and credit cards (as well as £90k with other lenders).She had a £38k a year job up here in the north so thats very good up here.

She went bankrupt as she didnt want to pay the money back.Discharged now and still in the same job but will be earning more now.I dumped her of course once i saw her spending/debt ways).

NMW workers have seen their bills and food shoot up though with inflation to pay for all those lovely defaults where they injected inflation into the system.

Great isnt it.

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