Here’s what happened
The Co-operative Group’s stake in the Co-operative Bank will fall to two per cent after a £700m rescue package was approved by shareholders yesterday.
The deal saves the lender from the brink of collapse and will reduce the Co-op Group’s stake from 20 per cent to one per cent, leaving the bank largely owned by five US hedge funds.
The bank which has four million customers put itself up for sale at the start of the year but abandoned plans in favour of restructuring, allowing existing hedge fund owners to take a bigger share of the business.
The consortium of US hedge funds is said to have agreed to inject £250m of new funds and write of debts of £440m.
Campaigners have said they hope the bank will retain its ethical stance despite the Co-op group no longer being a major backer.
Shaun Fensom from the campaign group Save Our Bank told BBC Radio 5 live he was ‘hopeful the bank’s special ethical stance will stay’.
“There’s every indication that the hedge funds – who are only going to be there for a while – understand that the commercial survival of the bank very much relies not only on talking the talk on ethics, but walking the walk as well,” he said.
The deal that was backed by 90 per cent of shareholders is expected to go through in September.