Co-op Group sells final 1% stake in troubled Co-op Bank

The Co-operative Group has revealed it no longer holds any stake in the troubled Co-op Bank after offloading its 1 per cent holding.

Co-op Bank will formally end its relationship with the Co-op Group in 2020. Picture: Rui Vieira/PA Wire
Co-op Bank will formally end its relationship with the Co-op Group in 2020. Picture: Rui Vieira/PA Wire

The mutual had been left with just 1 per cent after a £700 million rescue and refinancing deal to get Co-op Bank back on track completed weeks ago, but confirmed it has now sold the last remaining stake for about £5 million in the last few days.

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It leaves the pair with just a relationship agreement, which will also fall away over the next few years and end formally in 2020.

Details of the stake sale came as the Co-op Group posted a 48 per cent fall in underlying pre-tax profits to £14m for the six months to 1 July after shelling out £35m in member rewards and after losses at its insurance arm. On a bottom-line basis, profits rose 47 per cent to £25m.

The figures come weeks after Co-op Group emerged as the front-runner to buy convenience store operator Nisa, muscling out rival bidder Sainsbury’s. The mutual is thought to have tabled a £140m bid for Nisa, whose 1,300 shopkeeper members run 3,000 stores.

In its half-year results, the Co-op Group said its insurance business swung to an underlying operating loss of £1m against profits of £11m a year earlier as it increased reinsurance through third parties. On a reported basis, it saw operating losses widen to £11m from £4m a year ago.

But the group hailed its 14th quarter in a row of rising sales at Co-op Food, with like-for-like growth of 3.5 per cent in its first half.

Convenience store like-for-like sales rose 4.5 per cent.

It said underlying operating profits from the food business jumped 3 per cent to £65m and 22 per cent higher on a reported basis.

Steve Murrells, group chief executive of the Co-op, said it “continued to perform in the face of challenging markets”.

He added: “Across our business we are also maintaining our commitment of reinvesting for the future success of our Co-op.”

The group has signed up more than 1.1 million people as members since relaunching its reward scheme a year ago.