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Co-op bank ‘no longer for sale’ as talks progress

Co-operativeCo-operative Bank is no longer for sale after confirming that it is in “advanced discussions” with a group of existing investors.

It said the talks are aimed at raising equity capital to recapitalise the struggling Manchester-based bank.

If implemented, the financing would enable the bank to meet the longer term capital requirements applicable to all UK banks “and to continue as a stand-alone entity”, it said in a statement.

The proposal would also “safeguard the bank’s values and ethics”.

It said it noted recent media speculation referring to ongoing discussions and confirmed this morning that a majority of the key commercial aspects of the proposal have been substantially agreed between the bank and the investors.

Discussions over the Co-operative Pension Scheme are advanced and are continuing on other key matters

Given the advanced nature of the proposal, the board has decided to discontinue the formal sale process under the Takeover Code. The bank is, therefore, no longer in an “offer period” for the purposes of the Code.

It continues to discuss the capital raising options with the Prudential Regulation Authority.

Outlook

The bank’s revised PRA Buffer was confirmed by the PRA on Sunday and, alongside work undertaken as part of the sale and capital raise process, has resulted in an updated view of future capital requirements.

It is targeting “sustainable profitability” in the medium term and said it was planning for a dividend to be paid in 2021.

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