Co-operative Bank no longer up for sale

Co-op Bank Branch Image copyright Getty Images

The Co-operative Bank says it is no longer up for sale, pending an announcement on fund-raising proposals aimed at safeguarding its future.

Co-op Bank was forced to put itself on the market in February after it was unable to reach a strong enough footing to satisfy Bank of England regulations.

But in June, it said it was in "advanced discussions" with a group of existing investors on recapitalisation.

Now the bank says the plan has been "substantially agreed".

The Co-op Bank, in which the Co-operative Group still has a 20% stake, was rescued from the brink of collapse by a group of hedge funds in 2013.

In a statement, the bank also said talks were continuing over the separation of its pension fund from the Co-operative Group's scheme.

Under the current arrangement, the bank must carry a share of the Co-op Group's £8bn pension liabilities, something which is proving unattractive to potential investors.

Earlier this year, it reported its fifth annual loss in a row, although the £477m deficit for 2016 was an improvement on the £610m loss recorded in 2015.

When it offered itself for sale, the Co-op Bank blamed low interest rates and the higher-than-expected cost of its turnaround plan for its failure to meet the Bank's Prudential Regulation Authority rules.

The Co-op Bank has four million customers and is well known for its ethical standpoint, which its board had said made it "a strong franchise with significant potential" to prospective buyers.

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