Co-op To Unveil £2.5bn Losses As Crisis Deepens
The Co-operative Group is set to announce losses of up to £2.5bn after a series of “catastrophically inept decisions”.It is coming under increasing pressure to reform as it faces the biggest crisis in its history.
Former city minister Lord Myners, who was brought in help push through reform, has accused managers of making catastrophically inept decisions.
However he is is set to step down amid internal resistance to his plans.
One Co-operative insider told Sky News he was in doubt where responsibility lay for the group’s latest ills.
Jim Lee, an active member for 25 years, said: “The blame lies ultimately with the board.
“Clearly we have to look again at how that board came to be put together.
“Clearly we have to look at the personnel on that board and clearly we have to change those things in the future.”
Elections to the board are based on a complex three-tier structure with area committees and regional boards.
Critics say it is an outdated system which is ill-equipped to function in a globalised 21st century business environment.
There has been no evidence so far of Co-operative customers switching to other brands, but the series of crises do seem to be affecting confidence.
Outside one Co-op bank in the Lancashire town of Rochdale, where it was founded in the mid-19th century, customers told Sky News they were growing concerned.
One woman said: “I’ve always been a Co-op member. My mother was and my grandma was and we’ve always dealt with the Co-op.”
But asked if she would consider banking elsewhere, she said: “Well we’ve got money in other places but it just depends how it goes. I’ll be watching – let’s put it that way.”
Financial analyst Brenda Kelly said apparent differences at the top of the Co-operative Group were hampering the chances of recovery.
“To reform the Co-op will take time, but ultimately having agreement within Co-op itself will help shareholders get some confidence that they might get back on the front foot.”