Jobs at risk under Co-op Bank rescue plan

About 1,000 jobs could be at risk under the new rescue plan announced for The Co-operative Bank this morning, according to news reports.

City AM reported that there were fears that around 1,000 jobs would be cut under the plan, which is designed to plug the bank’s £1.5bn capital shortfall.

Separately, the BBC reported that the bank would cut its branch network by 15%.

Co-op is still seeking a buyer for its general insurance arm. The proceeds from the sale are expected to be used to help finance Co-op Bank.

Insurance group Legal & General is thought to be interested in Co-op’s profitable home insurance book of business, and Bermuda-based run-off buyer Catalina is believed to be interested in buying the insurance business.

Former RSA group chief executive Andy Haste has also been suggested as a buyer for the Co-op general insurance business.

The Co-op announced this morning that it plans to refinance its debt through the issue of new shares and bonds.

As a result of the plan, investors will own 70% of the Co-op Bank’s shares, while the Co-op group will remain the bank’s single largest shareholder with a 30% stake.

The plan now needs to be agreed by Co-op Bank’s investors.

The Co-op’s statement did not contain details about job cuts, branch closures or the general insurance sale.