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TIMELINE-Co-op Bank's journey from failed deal to scandal
January 7, 2014 / 12:51 PM / 4 years ago

TIMELINE-Co-op Bank's journey from failed deal to scandal

Jan 7 (Reuters) - Britain’s financial watchdog said on Tuesday it had no regrets about approving the appointment of Paul Flowers, arrested last year as part of an investigation into the supply of illegal drugs, to chair the Co-operative Bank in 2010.

Following is a chronology of events at the bank:

2013

April 24 - Planned sale by state-backed Lloyds of hundreds of UK branches to the Co-op falls through.

May 10 - Co-op Bank rules out government support after a warning from ratings agency Moody’s that it might need taxpayers’ money to plug a capital shortfall, which prompts its chief executive to resign.

Bank’s troubles mainly relate to bad commercial property loans, many acquired through takeover of Britannia Building Society in 2009.

June 5 - Co-op Bank appoints veteran banker Richard Pym as chairman to lead the lender’s restructuring, replacing Flowers.

June 17 - Co-op Group unveils plan to force bondholders to help plug a 1.5 billion pound ($2.4 billion) capital hole at Co-op Bank, under which the group will retain a majority stake in the bank while bondholders will end up with at least a quarter of the bank’s shares.

Oct 21 - Co-op bows to bondholder demands and agrees to hand them control of the bank in order to seal a rescue. The group is left with a 30 percent stake.

Nov 6 - Flowers questioned by Treasury Select Committee on the Lloyds deal, making mistakes about Co-op Bank’s finances. At one point he says it held 3 billion pounds of assets when the true figure is 47 billion.

Nov 17 - Mail on Sunday says Flowers filmed arranging to buy cocaine. In a subsequent statement, Flowers says: “This year has been incredibly difficult, with a death in the family and the pressures of my role with the Co-operative Bank ... At the lowest point in this terrible period, I did things that were stupid and wrong.”

Nov 20 - British Prime Minister David Cameron promises inquiry into how Co-op Bank had been “driven into the wall” by Flowers and asks why alarm bells over his behaviour hadn’t rung earlier.

Nov 22 - British police arrest Flowers as part of an investigation into the supply of illegal drugs.

Dec 12 - Co-op Group appoints ex-Treasury minister Paul Myners to review its operations for a token 1 pound ($1.6) salary.

2014

Jan 6 - UK financial regulators launch investigation into problems at Co-op Bank, which could lead to fines for the bank and its former directors.

Jan 7 - Britain’s Financial Conduct Authority (FCA) says it has no regrets about approving the Flowers’ appointment. “I don’t think it was a mistake in terms of the decision I made at the time,” Clive Adamson, director of supervision at the FCA, tells parliament’s Treasury Select Committee. “There are lessons to be learned from what happened ... Today he wouldn’t be approved as we would look for more experience.”

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