Bank of England urged to step in over Co-op Bank takeover
Article summary
Bank of England Governor Andrew Bailey has been urged to step into deal talks between US private equity giant Cerberus and the Co-op Bank amid allegations about the turnaround specialist’s “aggressive” behaviour. Cerberus, which has stakes in major financial institutions including Deutsche Bank, is currently circling the self-styled ethical lender, raising concerns among some MPs as it was accused in 2018 of misleading the Government on a deal to buy £13bn worth of mortgages from bust lender Northern Rock. The US firm had pledged to offer customers trapped on high interest mortgages a better deal and to transform itself into a ‘challenger bank’ in Britain, but three years later had still not been authorised to offer mortgages to the customers it took on. […] Tory MP Kevin Hollinrake, who co-chairs the All-Party Parliamentary Group on Fair Business Banking, said in an email to Mr Bailey after the takeover talks emerged last week that Co-op Bank’s customers were often attracted to it due to its “reputation of ethical and sustainable practices”, meaning that the sale of the bank to a “vulture fund would be of particular concern”. I have extensive experience of the devastating impact vulture funds, and Cerberus in particular, have on their customers,” he argued.
