Co-op Bank to axe 1000 jobs amid deep cuts

Co-op Bank is set to axe more than 10 per cent of its workforce. Picture: AFP
Co-op Bank is set to axe more than 10 per cent of its workforce. Picture: AFP
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THE Co-op is expected to announce deep cuts at its troubled bank today at the same time as it relinquishes control of the business to some of its hedge fund creditors.

Co-op Bank will reportedly axe more than 1,000 jobs, more than 10 per cent of its workforce, as part of an overhaul of its business and finances designed to address a £1.5 billion capital shortfall identified by banking regulators.

The cuts are expected to be announced as part of a scheduled announcement on the bank’s turnaround plan over the next four to five years, which is likely to involve shrinking its corporate lending operations in a further blow to cash-starved businesses.

The Co-operative Group will also hand shares worth 70 per cent of the bank to its largest bondholders.

Royal Bank of Scotland is also widely expected to reveal job cuts in the coming months as it carries out a strategic review of its operations and creates its own internal “bad bank” to
isolate its more toxic assets.

The bank yesterday declined to comment on reports that it is considering a withdrawal from Ireland if it cannot come up with a viable plan for its troubled Ulster Bank subsidiary within the next six months.

Ulster’s performance in terms of bad loans has been considerably worse than that at RBS’s other operations, and there is speculation it may be subject to deep cuts or even closed down altogether.