The co-op Group, the owner of the co-op bank – which was partly responsible for the mis-selling on payment protection insurance policies and agreements in the UK, has announced that it will completely erase it’s twenty percent stake, in light of the bank recording it’s first annual loss in four years.
The co-op bank announced earlier this week, that it lost £132 million in 2016, after the bank had recorded profits of nearly £25 million the previous year.
The co-op group said that the decision to offload it’s holding the in the co-op bank was due to the uncertainty as to whether the bank would be able to survive and the uncertainty of the bank being able to find a suitable buyer.
The Co-op Bank, which has four million customers, put itself up for sale in February.
It almost collapsed in 2013, but was rescued by a group of US investors. Under that deal, Co-operative Group kept a 20% stake in the bank.
But the new owners have struggled to revive the bank’s fortunes. Last year, it lost £477m – the fifth consecutive year of losses.
Co-op Group said it had made a “prudent valuation” of its stake in Co-operative Bank based on the “volatility” caused by the sale of the bank.
Co-op Group said that operating profits, which exclude the loss related to the bank stake, were up 32% in 2016 at £148m.
Those profits were boosted by the sale of its crematoria and a 3% rise in sales.
“We’ve made great progress in rebuilding our Co-op, with all our businesses delivering strong performances,” said chief executive Steve Murrells.
He said that in 2017, the Co-op Group would look to expand outside of its current markets.
“We are exploring how we can enter markets that are not serving people well and challenging existing providers,” he said.