Royal London members have overwhelmingly approved the life and pensions firm’s “transformative” acquisition of the Co-operative Banking Group’s fund management and life insurance businesses.
The £219 million deal, agreed in March, was approved by 95 per cent of members at yesterday’s extraordinary general meeting. Subject to final regulatory approval from the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), the acquisition – the mutual’s largest since it absorbed Royal Liver in 2011 – is expected to be completed by late summer.
Outgoing chairman Tim Melville-Ross said: “The board believes it will support further our mutual dividend policy, which has already seen over £325m allocated to our members’ accounts since 2007. It is transformative and exciting for us and we look forward to welcoming the Co-operative policyholders into Royal London.”
The deal will add about two million customers to Royal London’s existing base of four million and see funds under management at the Scottish Life parent company rise from about £50 billion to £70bn.
Yesterday’s meeting was the last to be chaired by Melville-Ross, who has handed over the reins to former Bank of England deputy governor Rupert Pennant-Rea. Co-op Bank is also looking to offload its general insurance division, and a spokesman said the mutual has received “significant” interest from potential buyers, although no timescales have yet been set to reach a deal.
The bank last month named Niall Booker, the former head of HSBC’s North American operations, as its chief executive following the resignation of Barry Tootell, who stepped down in the wake of a credit rating downgrade from Moody’s and the collapse of a £750m deal to buy 632 branches from Lloyds.
Plans to address a capital shortfall, said by some analysts to be as high as £1.8bn, are expected to be presented to the PRA soon but the bank declined to comment on reports that some bondholders may face cuts to their payouts.