Co-op calls time on local authority banking
1The Co-operative bank has announced it will withdraw from providing banking services to local authorities.
In a letter sent today to Leaders, CEO’s and its day-to-day operational contacts, the Co-op explained that its new strategy would see the bank focus on individuals and small and medium sized business customers. “This means” explained the letter, “that we will be seeking to exit some banking relationships which do not meet our future risk appetite or which have comprehensive and complex banking requirements.
“As part of this strategy, we have decided to withdraw from our involvement in providing banking
transmission services to local authorities.”
The Co-op, which held £290m of local authority money as of May this year, has pledged to see out its existing banking contracts with local authorities but will not renew them as and when they expire. The bank also made clear it will support any authorities wishing to bring forward their “timescales for seeking formal banking tenders.”
Andrew Larkin from treasury advisor Arlingclose told Room151: “Whilst it is a shame that Co-Op have pulled out of the market – as the feedback about their service levels has been very good – it is of no great surprise, indeed given the speculative credit rating of Co-Op it may well have struggled to maintain its position in the market over the next few years.”
[…] Executive of Move your Money, Laura Willoughby, said: “this is a short-sighted move for Co-op bank. Councils are an important and profitable market – otherwise Barclays would not be […]