Co-op Bank looking at fines from regulators
Remember the scandal that hammered the Co-operative Bank a while back? Well, the trouble is back, and it looks like they're facing fines from City regulators. The Co-op group owns 20% of its bank, after it was sorted out with emergency fundraising, that was needed to try and plug a £1.5bn blackhole that was uncovered in 2013.
Now, the bank is in control of hedge funds and private investors, and the Co-op Bank said that they are going to begin talks to get a settlement sorted out with the Financial Conduct Authority and the Bank of England.
"The outcome of any settlement discussions is currently uncertain both in the details of any findings and any potential financial penalty,” said the bank. There's no timeline for all this, as yet, but the FCA and the Bank of England's regulation body - the Prudential Regulation Authority - are weighing up some fines.
"FCA and PRA have recently indicated that their preliminary view is that they are minded to make findings against the bank covering certain decisions, events and processes over the period from mid-2008 to end-2013. Based on their current view, the FCA and PRA have indicated they intend to commence formal settlement discussions in July 2015," the bank said.
There's a lot of stuff to wade through first - an official report into the Co-op's cock-ups noted that all this bother was the result of poor management, bad lending, a banking culture that left a lot to be desired, and an overambitious drive for growth. The report also noted that the bank should have never merged with the Britannia Building Society during the beginnings of the banking crisis.
Of course, there was the Co-op bank's former chairman Paul Flowers, who caused a ruckus when it was found that he had no idea what bank’s balance sheet was like, and then pleaded guilty to possession of crystal meth, coke and ketamine.
New Co-op boss Niall Booker said: "The bank has been co-operating fully with the regulatory authorities. The risks of any adverse findings and penalties relating to these past events have been highlighted on multiple occasions previously. We will provide a further update as and when appropriate."