How the Co-op Bank was almost sold for £110m

August 29 2008

The inside story of how the award-winning and highly successful Co-operative Bank almost came to be sold for £110 million 14 years ago is told for the first time in a new book written by the Bank’s former Managing Director, Terry Thomas.

Mr Thomas, now Lord Thomas of Macclesfield, was MD at the Bank’s Manchester headquarters for nine years after originally joining as Marketing Manager in 1973. And in his autobiography An Inclusive Community with Integrity the Labour/Co-op peer — who suffered a near fatal stroke in 1999 shortly after his retirement from the Bank — tells of the shock at being informed by the then Co-operative Wholesale Society Chief Executive David Skinner that the Bank would be put up for sale and of his two-year long battle to reverse the decision.

He recalls: “I received the bombshell from, of all people, our parent company CWS. As a banker, I knew that any company at this point in its history — having been turned around from losses to profits better than had previously been achieved — was at its most vulnerable.

“However it (the decision to put the Bank on the market) had come as a complete surprise to me, since the losses we had incurred had been due to the board not insisting on a realistic strategy and developing a sophisticated approach to lending in general.”

Lord Thomas writes that it soon became clear to him via an intermediary organisation that an interested party had already been lined up.

He states: “We were amazed to hear that we were to be sold and the asking price was for the ‘ridiculous price’ of £110 million, which was acceptable to our parent company.”

A two-year struggle then ensued to retain the Bank for the Movement with Lord Thomas and his associates doing their best to interest the European Co-operative Banks and the Canadian Credit Union Bank in the proposed ‘sale’ — all of which had the desired effect of delaying the process.

Meanwhile it emerged that one potential bidder was controversial entrepreneur Andrew Regan, the businessman who tried to buy CWS. Lord Thomas says in the book that Regan’s plan in relation to the Bank was to sell it on to the Allied Irish Bank for “a multiple in terms of pounds of what CWS had been prepared to sell the Bank for in the first place”.

Eventually, thanks in no small measure to Terry Thomas’s dogged opposition, the decision was reversed; potential buyers were told in no uncertain terms: “The Bank is not for sale” — and the rest, as they say, is history.

• An Inclusive Community With Integrity is available from publishers The Memoir Club at £21.70 per copy including p&p. Call 0191 373 5660 or order online via: www.thememoirclub.co.uk. A review of the book will appear in the next issue of the News.

Category: Wider Co-op Movement