THe troubled Co-operative Bank reassured pensioners there was “no need to be concerned” about their investments in the group just a month before revealing plans to slash the value of their savings in a bail-out.
A manager had replied to a worried bond holder with a £50,000 investment in the bank in an e-mail just days after the Co-op’s credit rating was cut to “junk” status by Moody’s.
The following month, the bank revealed that it had a capital shortfall of £1.5 billion and told savers they faced losses of up to 40 per cent on their investments.
The pensioner emailed to say he and his wife were “extremely fearful that we are about to lose all of this very-important retirement savings nest egg, the income from which we rely upon”.
The manager wrote back, claiming “there is no need for you to be concerned”. He said: “We do acknowledge the need to strengthen our capital position… and have a clear plan to drive this forward. I hope this provides some reassurance.”
Several of the Co-op’s retail bondholders are pensioners who rely on the interest that the bonds pay, which ranges from 5.5 per cent to 13 per cent.
In a statement, the Co-op said that the evidence uncovered in the e-mails “raises questions, which we are looking into”, adding “we apologise if the customer feels he was misled”.