Co-op Bank may be taken over… says its own boss
Head of Co-op Bank says rising interest rates could trigger a wave of mergers with smaller banks – and admits his own company could become a target
Goal: Co-op quadrupled its profit
The head of the Co-operative Bank has said rising interest rates could spark a wave of mergers with smaller banks – and admitted his own company could become a target.
Nick Slape said rising interest rates, which boost lenders’ profits because they charge borrowers more, could be a “catalyst” for consolidation.
Slape said there was “nothing to see” for now that the Co-op would become a target. But he added: “It’s progressing. If the bank is making progress and performance is better, someone might want to look at us.’
He said he was “unaware” of potential suitors taking over his company.
Slape spoke after the bank reported more than quadrupling profits in 2022 to £132.6m, from £31.1m a year earlier.
It marks a major turnaround for the lender, which was on the brink of collapse before being rescued by a group of US hedge funds in 2017. ‘There has been talk of consolidation in the middle segment for a number of years now. It didn’t come,’ Slape said. But the rapid rate hike from 0.1 percent to 4 percent “could be a catalyst for things like that,” he added.
“I haven’t seen anything yet,” he continued. “We’ll look at things and run the ruler over them, do math like everybody else, but we’re not involved in conversations.”
In 2020, the cooperative was said to have received a takeover approach from American private equity firm Cerberus, but the talks came to nothing.
A year later, his own bid to buy rival TSB for reportedly £1 billion was rejected by TSB’s Spanish owner, Sabadell.
Then, last month, it was reported that the Co-op Bank had made a bid for a £650 million loan portfolio to be redeemed by rival Sainsbury’s Bank. The Cooperative has not responded to that report.
Some banks have been criticized for being ‘ungenerous’ with the interest they offer depositors as they quickly raise interest rates in response to the Bank of England’s moves. But Slape defended his company’s record, saying it passed higher rates on to all customers, including those in accounts that are no longer available to new depositors.