Co-op jobs at risk as bank loses £709m

Euan Sutherland, who became the group’s chief executive in May, apologised to customers and investors for the “challenging times”.

He stressed that he was not in a position to provide details about possible job losses. The Co-operative Group has 7,600 staff in Yorkshire.

The financial losses largely stem from the Co-op’s takeover in 2009 of the Britannia, which was found to hold bad loans.

The Co-operative Bank has also faced costly IT problems and regulatory demands, which means that the bank needs to find £1.5bn to plug a “black hole” in its finances.

The Co-op is relying on bondholders to approve a lifesaving funding proposal – the first major test of a plan asking investors, not taxpayers, to take a bailout hit.

A group of bondholders are fighting the bank rescue plan, however, and have called on financial regulator to lighten the demands on them.

The Bank of England’s Prudential Regulation Authority yesterday said it had anticipated the likely scale and source of the losses in June, when it made its assessment of the bank’s capital position.

Full story: Business, Page 15.