The Co-operative Group has struck a deal with hedge funds that has saved its crippled banking arm but cost the mutual control of the lender.

The supermarkets-to-funerals mutual has torn up its original restructuring plan after proposals to fill a £1.5bn black hole in the Co-operative Bank were rejected by creditors.

The bank was facing closure after the regulator ordered the group in June to raise £1.5bn to meet a capital shortfall or be put into “resolution”.

Ewen Sutherland, Co-op group chief executive, said: “We have reached an agreement in principle that saves the Co-op Bank. This is the first bank to be rescued and survive as a stand alone entity without taxpayer money.”

Under the new agreement, the group will retain only a 30pc stake in its subsidiary. The bulk of the Co-op Bank’s £1.3bn of subordinated debt holders will be swapped into bank shares, handing them 70pc of business.

so the co-op bank will no longer be a co-op and with that, as wub said, will go it's ethical policies...
f'n great

the co op may not be perfect, the banking arm certainly aint been, but it still represents a cross the decades, enduring example of how there are other ways of doing business.

we'll have to see how the rest of it fares in the near future innit.