Four leave board as Co-op Bank prepares for market flotation

The bank said non-executive directors Duncan Bowdler, Peter Harvey, Bob Newton and Len Wardle will stand down but remain on the board of the financial services arm of the wider funerals-to-supermarkets Co-op Group.

The lender is attempting to plug a £1.5bn black hole in its balance sheet through a painful fundraising which will force losses on to owners of its bonds and leave it with a stock market listing – ending its prized mutual status.

It said the boardroom departures will increase its independence ahead of the capital raise, after hedge funds controlling a large slice of its bonds complained of a conflict of interest between the bank and the wider Co-op group.

Hedge funds represented by investment bank Moelis & Co have also demanded the bank tear up its rescue plan, instead proposing an alternative plan of converting all its bonds into shares, giving it a bigger stake in the lender.

The wider Co-op Group has insisted there is “no plan B” to saving the bank, which slumped to £709.4m losses in the first six months of the year.

But last month the bank set up an independent committee to consider the alternative proposals.

Mr Bowdler is a Co-op employee who works on trading legislation, while Mr Harvey is a banking professional who spent more than three decades at Barclays.

Mr Newton has worked at insurers including Aviva and NFU Mutual. Mr Wardle is chairman of the wider Co-op group, and was appointed in 2007