Newsletter 28 April 2024

Welcome to this April newsletter from the Customer Union for Ethical Banking, the independent union for customers of The Co-operative Bank.

This month’s newsletter has two main items, both with positive news. Firstly a major milestone in the Coventry Building Society’s bid to buy the bank. And secondly, a response from the bank on its Sustainability Report, accepting our “challenge” on independent review of the Ethical Policy.
 

Coventry and Co-op agree terms for £780m acquisition

After a period of discussions and due diligence that began in December, Coventry Building Society has made an offer of £780m to buy the Co-operative Bank. The boards of the two organisations have announced what is termed “non-binding heads of terms”, essentially an agreement in principle, but stress that “there can be no certainty at this stage” that the acquisition will go through. It also still needs approval from the regulator.

You can read more at the FT (£) or The Guardian, and there’s a helpful take on what this means for your account from Money Saving Expert (in short: nothing yet).

As we said back in February, we’re very supportive of the proposed merger, which we think would align perfectly with our two main goals on ethics and ownership. One interesting question as a deal moves a step closer is whether members of the building society will have any say over the proposal (they won't). While it could be said to be ironic if the return to some form of democratic control over the bank is achieved without such a say, there are practical problems.

There’s a very recent precedent for a building society taking over a bank, in the form of Nationwide’s acquisition of Virgin Money - another really positive sign of a growing mutual sector. A Guardian column from Nils Pratley last month explored very helpfully the reasons why members wouldn't get a vote in that case, and the same argument applies here.
 

A note from the bank to you on our Sustainability Report view

After we published our view on the bank’s 2023 Sustainability Report in last month’s newsletter, we wanted to give the bank a right of reply. They sent us a statement addressed to you as members of the Customer Union, which you can read on our website here.

As part of its comment, the bank said: “We accept the Customer Union’s challenge regarding independent review of our Ethical Policy screening and we want to reassure members of the Customer Union that we have started making some steps towards reinstating this and commit to providing more information when we are able to do so.” We consider this very welcome news, as this has been a consistent ask of ours to the bank for a while now, and look forward to hearing more.
 

Major job losses at the bank

Unfortunately, amid all this positive news there’s also this – the Co-op Bank is cutting 400 jobs, or a pretty hefty 12% of total staff. The bank said the cuts were part of “next phase of its transformation plan”. It’s unclear whether this has anything to do with the proposed acquisition, although such a big reduction in staff must, one would expect, have been raised in discussions with Coventry. Unite the Union said it “will do everything in our power to avoid compulsory job losses at the bank.”

The news comes as a surprise after bank representatives told at our most recent Gathering about how they are increasing customer contact staff to improve service levels and call waiting times. We’ll be sure to raise this with the bank as part of our next quarterly meeting.
 

That’s all for this month’s newsletter; thank you as ever for reading and supporting the Union.

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With best wishes,

The Save Our Bank team

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