MSE News: Co-operative Bank: how safe is it, after Moody's downgrade?

bendipa

The worst thing anyone can do is to panic out. This is not an imminent collapse situation like Northern Rock was. No one who has any account with the Co-op will lose anything unless they have over £85;000 in deposits. And even if they do they're still unlikely to lose anything. This is not Cyprus. Remember, not one Brit who has been caught up in any previous banking crisis whether a UK bank or someone with savings in a foreign one has lost 1p. The CEO has now gone. Hopefully the Co-op will get their act together without a bail-out as they are currently maintaining..

Thrugelmir

bendipa wrote: »

Hopefully the Co-op will get their act together without a bail-out as they are currently maintaining..

Expect further downgrades on other UK banks as capital solvency requirements progressively become stricter.

Jimbojet

I have two pensions with the Coop , Does anyone know if they are covered under the protection scheme ?

jamesd

Are the pensions as an employee or as a customer?

If as a customer they are probably held in trust and completely safe from bankruptcy of the company that hosts them.

If as an employee, a defined benefit pension like final salary would be covered by the Pension Protection Fund. A defined contribution fund would probably not have the money with Coop so would not be affected but if it was with them it'd be held in trust and not linked to their own money.

The_Thrilla

liz545 wrote: »

I have my current account with Smile, and I've been a satisfied customer for years. My savings aren't with Smile, but this news does worry me - if they get into further difficulty, will I be able to withdraw money, and what will happen to my direct debits? I don't want to move banks, but I'm wondering if it's worth opening a basic account somewhere else so I'm able to move my salary after it's paid.

Yes, the basic defence of money is to spread it around. OK, so you will be reimbursed up to 85K, but if your salary is paid into one account and the bank suddenly goes bust, you will have your salary in limbo while you have bills to pay. And you won't know when your compensation is coming through.

I have about thirty different accounts, not all of them British.

pqrdef

bendipa wrote: »

The worst thing anyone can do is to panic out. This is not an imminent collapse situation like Northern Rock was.

We don't know. It depends how urgently they need to refinance their lending, since they'll find it more difficult to borrow now.

And if they struggle to borrow, they'll be reluctant to lend, and may start calling in loans where they can. I'd be worried if I had an overdraft at the Co-op.

pqrdef

Thrugelmir wrote: »

Expect further downgrades on other UK banks as capital solvency requirements progressively become stricter.

Not to mention that the state of their loan books will become progressively more apparent, and the government remains dedicated to ensuring that those loan books perform as badly as possible.

jtotheb

I have a business account with the Co-op. Am I covered in the same way as individuals?

alastairq

I note, from Robert Peston, [who, I believe, displays an undercurrent of support for the likes of Co-op?}.............that the issues of 'bad debt' that Moody's [Moonies?]...cited as the reason for the downgrade....stemmed largely from the acquisition of the Britannia Building Society?

I...as a lay-person in the financial world, consider the failure of the Lloyds takeover to be a good thing...!

Mention of apparent political affiliation in the same sentence as 'ethics' is to me totally misleading.

Or, is it chagrin at the probability that Co-op BAnk's core customer base is more likely to have been found amongst the country's LAbour supporters, than from within the ranks of the Tories, or tory-wannabe's?

What is of concern to me, more than a mythical credit rating...is the real possibility of all current accounts..[especially basic accounts] being subject to charges for administration?

Whilst this may seem a reasonable act to those of you who consider themselves to be financially well-protected, for the vast, but generally silent minority of economically poor people, having to pay for services which are actually almost totally unavoidable in our current financial society is yet another unwanted, and unnecessary burden.

In my view, every financial aspect of our lives is unavoidably tied up with the need to hold a banking account of some sort.

Our incomes cannot be paid, in cash.

Neither can many, if any, of our reasonable domestic bills.

Everything is governed and controlled via bank accounts.

BAnk charges levied on accounts solely providing basic [but essential] services would be a tax on living.

rb10

Thrugelmir wrote: »

Expect further downgrades on other UK banks as capital solvency requirements progressively become stricter.

I don't think that will lead to downgrades. Most banks' capital ratios are well ahead of the requirements. Co-op is in a little league of its own down at the bottom.