* Baker-Bates says branch deal was a 'giant step too far'
* Baker-Bates says his concerns were ignored by board
By Matt Scuffham
LONDON, Jan 28 The former deputy chairman of
Britain's Co-operative Bank said he stepped down
because he opposed its plans to buy hundreds of branches from
Lloyds Banking Group.
Rodney Baker-Bates told parliament's Treasury Select
Committee that he considered the planned purchase of 630
branches which Lloyds had been ordered to sell by European
regulators a "giant step too far", and that his concerns were
ignored by other Co-op executives.
"I failed to win the argument. I set out to convince the
board that I felt Verde (the name given to the sale) was a giant
step too far," he told parliament's Treasury Select Committee on
Baker-Bates retired from the bank's board in January 2012
and no reason was given for his departure at the time.
The sale collapsed in April last year and the full scale of
the Co-op Bank's problems later became apparent when a 1.5
billion pound ($2.5 billion) capital shortfall was exposed and
it was forced into a restructuring which saw it fall under the
control of bondholders including U.S. hedge funds.
The bank's problems were exacerbated in November when its
former chairman, Paul Flowers, became embroiled in a drugs
scandal. Baker-Bates and a second deputy chairman, David Davies,
had been brought on to the board of Co-op Bank in 2010 to
compensate for Flowers, a Methodist minister, having no banking
The committee is examining why Co-op pursued the purchase
and whether it was subjected to undue political interference.
Davies also told the committee that he also opposed the
purchases of branches from Lloyds. He said that he became aware
in January 2012 that Lloyds had misgivings about selling the
branches to the Co-op and had "ceased engaging on capital and
Baker-Bates told the committee he was overlooked as a
candidate for the chairman's role, in favour of Flowers, who he
was told at the time had scored highly in psychological tests.