Co-op chief beefs up bank management

Picture: Getty
Picture: Getty
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Co-operative chief executive Euan Sutherland has beefed up his management team at the embattled mutual, which has suffered a string of setbacks in recent weeks.

Scots-born Sutherland, previously chief operating officer at B&Q owner Kingfisher, took up the top role last month and has lined up Richard Pennycook, the former finance chief of supermarket chain Morrisons, as the group’s new finance director.

Pennycook joins on 1 July, initially on an interim basis, filling the role left vacant by company veteran Steve Humes, who resigned at the end of last month.

In addition, former Alliance & Leicester chief executive Richard Pym has been appointed as Co-op Bank chairman.

Pym replaced Paul Flowers, who stood down after three years at the bank’s helm, and said: “We are clearly focused on actions to strengthen the bank’s balance sheet and resolving the current underlying issues.”

He will continue in his role as chairman of UK Asset Resolution, the Treasury-owned body that holds almost £70 billion of loans made by failed mortgage lenders Bradford & Bingley and Northern Rock, but will quit as a director of British Land.

Sutherland said Pennycook and Pym “have fantastic track records in business and the team and I look forward to working closely with both of them”.

As well as strengthening the mutual’s management, Sutherland is trying to tackle a capital shortfall that some analysts estimate could be as high as £1.8bn. Plans to address this are due to be presented to the Prudential Regulation Authority within the coming weeks.

Co-op Bank recently suffered a credit rating downgrade from Moody’s. It is selling off non-core assets and has stopped lending to new corporate customers as it tries to shore up its finances.

The Moody’s downgrade, along with the collapse of a £750 million deal to buy 632 branches from Lloyds Banking Group, led to the departure of Co-op Bank chief executive Barry Tootell. Former HSBC North America head Niall Booker takes up the chief executive role on Monday.