Newsletter 27 February 2021

Welcome to this February newsletter from the Customer Union for Ethical Banking, the independent union for customers of The Co-operative Bank. This month, the Co-op Bank’s results and sustainability reporting; the bank’s answers to your questions; and another demutualisation threat in the finance sector.

The bank’s results and reporting

On Thursday this week the Co-op Bank published its 2020 Annual Report and Accounts alongside its 2020 Sustainability Report (21 pages).

The headline financial result was that the bank had cut its losses despite the pandemic, with a pre-tax loss of £103.7m compared with last year’s £152.1m. Chief executive Nick Slape commented he expects a return to profitability “in the near future” and before the end of the year.

We want to take some time to review the Sustainability Report, since it only just came out, so we will have a fuller commentary on that next month. For now we’ll just point to the business the bank turned away as a result of its ethical policy in 2020:

• “an organisation considered to be advocating incitement to hatred on the basis of religion”

• “a consultancy working within the defence sector whose activities were considered to be in conflict with our position on the manufacture or transfer of arms to oppressive regimes”

• “a company involved in the manufacture of indiscriminate weapons systems”

• “a business offering short term, high interest loans”

• “16 business whose activities were considered to be in conflict with our Ethical Policy statement on the extraction and production of fossil fuels due to involvement in the oil and gas sector”

• “One business was declined for failing to meet our expected standards of animal welfare”.

The number of businesses turned away this year is a sign that the bank’s Ethical Policy still has a real impact. As we reported last month, the bank has said it intends to have an independent audit carried out of the report post-publication, in response to our campaigning, and we’ll be asking the bank for an update on this when we speak to them next.

The bank answers your questions

As part of our recognition agreement, we meet with the Co-op Bank every quarter, which gives us the opportunity to present questions from our members. Our last meeting was back in September 2020 – it’s taken a while to compile the responses as there were some follow-up questions to resolve, but the answers are online here.

The topics covered include the bank’s progress towards putting new security measures in place to stop bank transfers going to the wrong person (“confirmation of payee”); branch closures; IT problems at the Co-op’s online bank “smile”; concerns about the bank sending active contactless cards through unsecured mail; recurring problems from a supporter transferring money to Sudan for their charity (which have again been resolved); support for Co-op News; and the chances of the bank offering services to local authorities again.

We’ll be meeting the bank again on Thursday next week, so let us know your questions – including any about the Sustainability Report - by replying to this mail.

LV= (Liverpool Victoria) demutualisation threat

A supporter points out that one of the UK’s oldest and largest financial mutuals, LV= (formerly known as Liverpool Victoria), is under threat of demutualisation. Echoing the fate of the Co-op Bank, there are plans to sell the mutual to the American private investment firm Bain Capital. An all-party parliamentary group is holding an enquiry into this sale. If you’re a member of LV= or would like to find out more, see The Co-operative Party’s campaign page

The Co-op Bank on the front foot on ethics (in 1996)

And finally, we like to see the bank being bold with its ethical advertising, and we’ve found some more great Co-op Bank ads from the archive. Here’s one that promotes the bank’s Ethical Policy on harmful chemicals – while being a bit sinister – posted on our Facebook page - or on our site.

With thanks and best wishes,

The Save Our Bank team