Under pressure Co-operative beefs up management

Under pressure Co-operative Group beefs up its management team

Associated Press

LONDON (AP) -- The Co-operative Group, Britain's biggest mutual business, bolstered its management team on Wednesday by naming a new finance director for the group and a new chairman for its banking unit.

The customer-owned company named Richard Pennycook, the former finance director at supermarket chain Morrisons, to the position of group finance director.

It also appointed Richard Pym to act as an independent non-executive chair at the Co-operative Bank, which has been under pressure since Moody's Investors Service downgraded the U.K. lender's debt ratings to "junk" status. Pym will keep his position as the head of UK Asset Resolution, the holding company for two nationalized banks.

Founded in 1863, the Co-op Group has supermarkets, funeral services, pharmacies as well as 1.5 million current account holders in its Co-operative Bank.

Concerns about the bank's capital position have been rising since it pulled out of a deal to buy some 630 branches from another U.K. lender, Lloyds Bank. It stopped lending to new corporate customers last month in hopes of repairing its finances.

The group recently appointed former senior HSBC banker Niall Booker as chief executive of the banking arm and deputy chief executive of the wider group.

Moody's has said the bank's problems stemmed from the 2009 acquisition of Britannia Building Society, arguing that the bank failed to properly assess the losses that the portfolio would experience.

"We are clearly focused on actions to strengthen the bank's balance sheet and resolving the current underlying issues," Pym said in a statement.

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