Summary Box: Co-operative Group unveils bank plan

Summary Box: Co-operative Group unveils rescue plan to for its bank

Associated Press

CONVERSION: The Co-operative Group, Britain's biggest mutual business, said it will rescue its troubled banking arm by converting some of its bonds into shares, which will be listed on the London stock exchange.

BAD LOANS: The Co-operative Bank's $2.3 billion hold in its balance sheet stems from bad commercial loans it took on taken when it merged with the Britannia building society in 2009. As a member-owned institution, Co-op has been hamstrung in efforts to raise fresh capital.

NO BAILOUT: By forcing bondholders to exchange their debt for shares, the bank doesn't have to approach the British government for a bailout. In 2007 and 2008, a raft of big-name UK retail banks, including Royal Bank of Scotland and Lloyds Bank, had to be rescued with taxpayer's money. Some 5,000 investors who lent money to the Co-op through securities are affected.

View Comments (0)