The Co-operative Bank

This article is about the UK bank. For other similarly named banks, see Co-operative Bank (disambiguation). For the general concept, see cooperative banking.

The Co-operative Bank plc

Type	Consumer co-operative
Founded	1872 (1872)
Headquarters	1 Balloon Street Manchester M60 4EP, United Kingdom
Key people	Barry Tootell, acting chief executive (the Co-operative Banking Group)
Industry	Financial services
Products	Retail banking, commercial banking and independent financial advice
Revenue	£3.5 billion
Website	http://www.co-operativebank.co.uk/

The Co-operative Bank plc is a commercial bank in the United Kingdom and Guernsey, with its headquarters in Manchester.

The bank markets itself as an ethical bank, and refuses to invest in companies involved in the arms trade, global climate change, genetic engineering, animal testing and use of sweated labour as stated in its ethical policy. The ethical policy was introduced in 1992. In 2002, Co-operative Group Limited brought the bank and the Co-operative Insurance Society under the control of a newly incorporated holding society, Co-operative Financial Services, which became the Co-operative Banking Group in 2011.

History

The Stockport Pyramid building provides administrative services, including a call centre for Smile and the Co-operative Bank.

The Bank was formed in 1872 as the Loan and Deposit Department of Manchester's Co-operative Wholesale Society, becoming the CWS Bank four years later. However, the bank did not become a registered company until 1971. In 1975, the bank became the first new member of the Committee of London Clearing Banks for 40 years and thus able to issue its own cheques.

In 1974 the Co-operative Bank offered free banking for personal customers who remain in credit. It was also the first Clearing Bank to offer an interest-bearing cheque account, in 1982.

Membership

Despite its name, the Co-operative Bank is not itself a true co-operative as it is not owned directly by its members, but by a holding company which is a co-operative—it is wholly owned by Co-operative Banking Group, whose sole shareholder is the member-owned Co-operative Group. Its customers may, however, choose to become Co-operative Group members and hence indirectly acquire an ownership interest in the Bank, earning dividend on their account holdings and borrowing with the Bank.

Unlike other co-operative banks, such as the Dutch Rabobank, the Co-operative Bank does not have a federal structure of local banks, instead being a single national bank.

Smile

Main article: Smile (bank)

The bank launched a separate internet-only operation known as Smile in 1999, which, according to surveys, has the highest satisfaction ratings among UK banks and has received many awards in recent years for customer service and online banking. It has around half-a-million customers. Smile has its call centre based at a unique pyramid building in Stockport.

Independent financial advice

A statue of cooperative pioneer Robert Owen stands in front of the bank's head office in Manchester.

The Co-operative Bank offers whole of market independent financial advice (IFA) through Co-operative Independent Financial Advisers (CIFA). CIFA are based about 500 metres from the Co-operative Bank "Pyramid" in Regent House, Stockport. CIFA offers independent advice mainly on investment, retirement and Inheritance Tax planning. CIFA has over 100 advisers across the UK, incorporating specialists in Complex Pensions and Corporate Financial Planning. CIFA currently has around 70,000 clients across the UK made up of clients with links to the bank, and through their extensive seminar programme held at venues up and down the country.

Britannia Building Society

In October 2008, it was reported that Co-operative Financial Services was in talks with Britannia Building Society with a view to sharing facilities and possibly a full merger.

Such a venture was facilitated by the passing of the Building Societies (Funding) & Mutual Societies (Transfers) Act 2007, although further secondary legislation was required before such a merger could take place.

On 21 January 2009, Co-operative Financial Services and Britannia Building Society agreed to a merger, with the new 'super-mutual' being brought under the stewardship of The Co-operative Group. The proposed merger was subject to a vote by Britannia's members at their AGM at the end of April 2009.

On 29 April 2009 Britannia's members voted overwhelmingly in favour of the merger.

In the short term, both Britannia Building Society and the Co-operative Financial Services continue operating their own products, branch networks and systems.

The Co-operative Bank on Vicar Lane in Leeds, West Yorkshire.

IT problems

In 2009, the Co-operative Bank received considerable public criticism from business customers for problems with the bank's internet banking service. It subsequently emerged that the service crashed when more than 130 users logged on simultaneously, and some customers were left unable to access their accounts for days.

In 2011, some Co-operative Bank customers were left temporarily unable to use their debit cards as a result of IT problems.

Press reports have suggested that the Financial Services Authority (FSA) may intervene to block the Co-operative Bank's proposed purchase of some Lloyds TSB branches, due to concerns about the Co-operative Bank's ability to integrate IT systems. It is rumoured that the FSA is particularly concerned that the Co-operative bank is still behind schedule in the integration of its IT systems with those of the Britannia Building Society, despite the fact that the merger took place in 2009.

Ethical policy

While the bank, like any other, is run on profitable lines, it does occasionally turn away new business which it feels may compromise its ethical policies. In the 2005/06 financial year, whilst making profits of £96.5 million, it turned away business of nearly £10 million.

Despite its ethical claims, the bank does invest substantial amounts from its investment funds in Imperial Tobacco and British American Tobacco both of which have faced numerous claims of irresponsible marketing to children, and accusations that they provide support to smugglers.

In June 2005, the bank closed the account of a Christian evangelical group (Christian Voice) because of its standpoint on homosexuality, specifically the group's "discriminatory pronouncements on grounds of sexual orientation". They said the group was "incompatible with the position of the Co-operative Bank, which publicly supports diversity and dignity". Christian Voice said the bank was discriminating against it on religious grounds. Gay Times subsequently selected the Co-operative Bank for its Ethical Corporate Stance Award.

Further reading

• Wilkinson, Adrian; Balmer, John M.T. (1996). "Corporate and generic identities: lessons from the Co-operative Bank". International Journal of Bank Marketing 14: 22–35. doi:10.1108/02652329610119292 

External links

• Official website