Co-op to pull out of banking - completely

opinions4u

There is a major challenge for consumer regulation here.

Years of it have chipped away at smaller players. We've gone from over 600 building societies to less than 50. Regulation adds a cost burden that is, for any things, the same for a giant like Lloyds as it is for a minnow one branch building society.

The inevitable outcome is less consumer choice. And fewer regionalised lenders.

While I don't know what the solution is, I'd like to see something done to level the playing field. If Co-op are finding it a struggle something is badly wrong.

meer53

opinions4u wrote: »

There is a major challenge for consumer regulation here.

Years of it have chipped away at smaller players. We've gone from over 600 building societies to less than 50. Regulation adds a cost burden that is, for any things, the same for a giant like Lloyds as it is for a minnow one branch building society.

The inevitable outcome is less consumer choice. And fewer regionalised lenders.

While I don't know what the solution is, I'd like to see something done to level the playing field. If Co-op are finding it a struggle something is badly wrong.

I don't get the impression that the Co-op are struggling ? What makes you say that ? They just decided that to triple the number of their branches in this economic climate wasn't a good idea. Sounds like common sense to me.

dr_adidas01

meer53 wrote: »

I don't get the impression that the Co-op are struggling ? What makes you say that ? They just decided that to triple the number of their branches in this economic climate wasn't a good idea. Sounds like common sense to me.

Really there not struggling?

Its just lost £662 million pounds from its banking division. Its also had to set aside £150 million to cover its PPI claims. Its written off another £150 million for its IT systems (which we all know is so antiquated). Also £337 million of bad debt write off for its take over of Britannia building society.

Its also sold off its Insurance division to royal sun. If that's not a sign its struggling I don't know what is????

Thrugelmir

john1002 wrote: »

it is hard to believe that the goverment would allow this considering it is now due to the bad times that there considering it,

Precisely why they might in the longer term. Retail banking is in decline. The mortgage market is going to shrink (projections range between 25% - 40%). So with increased regulatory costs and low margins. There's only room for so many big players. The remainder will being local building societies which appear to be rising from the ashes. .

System

Clearly the CO-OP are not used to actually paying for things.
Britannia gave themselves away to CO-OP for nothing.

michael1983l wrote: »

Even if Co-op pulled out of banking, it wouldn't be due to collapse. They would sell the Business assets and accounts on to another bank and your account and money would be safe.

To be honest I cannot see them doing this after recently acquiring Britannia and that other bank I forget the name of.

My_name_is_not_Guinevere

Heng_Leng wrote: »

Clearly the CO-OP are not used to actually paying for things.
Britannia gave themselves away to CO-OP for nothing.

So true! Their building in Skelmersdale used to be a car park (no joke!) and their other one in Stockport was bought over when the original backers went bust.

kaybo69

I'd call that shrewd

opinions4u

meer53 wrote: »

I don't get the impression that the Co-op are struggling ? What makes you say that ? They just decided that to triple the number of their branches in this economic climate wasn't a good idea. Sounds like common sense to me.

Their recent losses and desire to sell off CIS, previously a core business, suggests otherwise.

The Verde branches will be a very good buy for somebody. If there's a somebody who can afford it.

Thrugelmir

opinions4u wrote: »

The Verde branches will be a very good buy for somebody. If there's a somebody who can afford it.

I was musing over this.

The bank has a market value of around £34 billion. The hived off share is around 20% of the branch network.

So the business is worth say around £7-£8 billion.

Non Government share holding is 60%. So investors all receive shares in NewCo. When the business gets split away.

That then leaves Government share of 40% worth £3 billion.

No reason why this can't be placed in the market and/or offered as a tender in the market.

Welcome contribution to the Exchequer.

pqrdef

Thrugelmir wrote: »

Welcome contribution to the Exchequer.

But of course it'll crystallize what they've lost on the LBG shares.