Bizarre that Wellington’s newest bank should open its doors on the very day that its parent company reveals that 50 Co-operative Bank branches will close in a desperate bid to survive.
Ironically, the new premises on South Street were formerly the local base for the Britannia Building Society. It was the purchase of BBS that sent the Co-op Bank into a spiral of debt that may or may not prove fatal.
Here’s how The Independent newspaper reported the story today:
“The Co-operative Bank is to close around 50 of its branches as control of the lender is handed to a group of powerful investors as part of a rescue plan.
“It is hoped that the revised plan will plug a £1.5 billion black hole in the bank’s finances caused by the purchase of the Britannia Building Society and abandoned plans to buy hundreds of Lloyds Bank branches.
“Investors who bought bonds in the troubled lender, including US hedge funds, will be given 70 per cent of the bank, leaving the Co-operative Group with just 30 per cent.
“The funerals-to-supermarkets group had initially wished to retain control of the bank by giving bond investors a minority stake in return for a £500 million loss on their debt.
“But the bondholders, which include US hedge funds Aurelius Capital Management and Silver Point Capital, are to take charge of the bank under the new plan, which will see it listed on the stock market next year.”