According to unconfirmed reports, the co-op bank seems to be in major trouble as the bank has been placed by the Bank of England on ‘intense supervision’ in part due to the lack of progress, that the bank has been experiencing in regards to it finding a buyer for it’s banking operations.
The BBC reported that the Bank Of England was urgently looking over plans that if a buyer is not found – that the bank was be closed down by the bank of England on purpose.
If this were to occur, it could also entail the government having to shell out billions to save the bank.
The BBC website had more news on the story.
Co-op Bank customers will be protected whatever happens, but professional investors took a beating on Wednesday.
The bank has been looking for buyers since February and said it was “pleased” with the interest shown.
Its statement added that the sales process was “well-ordered” and it was “engaging with potential bidders as planned”.
Some creditors saw the value of their bonds tumble to just 25% of their face value of the amount they lent the bank.
That is down from 50% just a week ago and bond traders told the BBC that indicates a 1-in-4 chance of the bank’s survival in its current form.
The loss-making bank put itself up for sale last month, after saying it was struggling to earn enough money to mend its broken finances.
It recently reported an annual loss of £477m, bringing its cumulative losses over the last five years to more than £2.7bn.
The board is still insisting that its preferred solution is a sale of the entire bank, but the short list of buyers is getting shorter.