Vote may kick start Co-op break up

The division is subject to an “extensive review” by new Co-op chief executive Euan Sutherland following the collapse of a plan to buy 632 bank branches from Lloyds and merge them with the Co-operative Bank.

Apart from selling the life insurance and asset management business to Royal London, it has also put its general insurance division up for sale.

It revealed last month it had stopped lending to new business customers, raising more questions about its  future. However, last week it hired Niall Booker from HSBC to replace Barry Tootell as chief executive of the bank, suggesting it wants to hold on to the business.

Half a million policyholders in Royal London, which includes Scottish Life, Scottish Provident and Bright Grey, had until 10am today to vote on the acquisition of the Co-op assets. The result will be announced at an extraordinary meeting on Tuesday, to be followed by the annual meeting.

Royal London, already Britain’s biggest mutual insurance company, will take on 117 staff in Co-operative insurance services and 53 in asset management.

Funds under management will increase from £50 billion to £70bn and customers from four million to six million, while the number of policies the company manages will increase from 6.8 million to 10.3 million.

This year Royal London is also piloting an exercise to allow up to 1,000 members the opportunity to view the EGM/AGM proceedings online, hoping that this option will prove popular with those who are unable to attend the meeting.

Phil Loney, Royal London Group chief executive, said: “The proposed acquisition is a perfect fit for our business. It presents a number of strategic opportunities to the company in the future which will further increase our scale, capabilities, profitability and financial strength.

“It is a truly compelling opportunity and one which the Royal London board wholly commends to our members.”