Co-op Bank considers alternative rescue plan options

A branch of the Co-Co-operative bank The bank faces a £1.5bn shortfall

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The Co-operative Bank is to look into alternatives to a current £1.5bn rescue plan.

The bank has already suggested the financing will come from sales of its insurance businesses, a bond issuance to existing bondholders, and capital from the Co-operative group.

On Friday the Co-op said an independent committee would be formed to discuss other options.

It will be chaired by the bank's chairman, Richard Pym.

The bank's current plan does not involve any help from taxpayers, but will mean bond-holders will lose out in the short term.

Financing problems have been an issue for the Co-operative for some time.

Earlier this year it reported a loss of £709m, with nearly £500m in write-downs from its merger with the Britannia Building Society.

It was also compelled to pull out of a proposed purchase of 600 Lloyds Bank branches, after its funding shortfalls came to light.

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