30 April 2014
The Kelly review, published today, has cited M&A activity as the root cause of the Co-op’s downfall.
More specifically, it has cited the Co-op Bank’s merger with Britannia Building Society as the cause of the bank’s shortfall, which, Sir Christopher Kelly says, ‘should probably never have happened. Both organisations had problems. Bringing them together exacerbated those problems.’
Sir Kelly added that the bank’s ‘executive management failed to exercise sufficiently prudent and effective management of capital and risk. The Banking Group Board failed in its oversight of the Executive. The Group Board failed in its duty as a shareholder to provide effective stewardship of an important member asset. Collectively they badly let down the Group’s members.’
The independent review was chaired by Sir Christopher Kelly and looked into the events that led to the Co-op Bank reporting a capital shortfall of £1.5bn.
The Co-op Group and the Co-op Bank jointly commissioned the Review in July 2013.