The Financial Times reported the Co-operative Group, parent company of CFS, appointed Deutsche Bank to conduct the review and ‘sound out’ interested parties — including insurers such as Royal London, Legal & General, Resolution, Aviva and the Phoenix Group — regarding the possible sale of the Co-operative Insurance life and savings division.
Other newspapers also took up the story and the Guardian claimed CFS had received “some expressions of interest” since circulating information packs.
However a spokesman for CFS emphasised that no decision has yet been taken on the future shape of the business, which has a sales force of over 600 people and assets of £18 billion, and said the priority was to adopt a unified approach for CFS, which is now operating two separate business models following Britannia’s decision to merge last year.
The spokesman told the News: “Following the merger, CFS committed to a strategic review of its life and savings business. The aim of this — along with the wider integration that is underway — is to best position the organisation to achieve its vision of becoming the UK’s most admired financial services business.
“CFS is now considering a range of options for the future shape of its life and savings business that also takes into consideration the impact of major industry initiatives. We are considering all options, including retention of the life and savings business, and no decision has yet been reached. However the interests of colleagues, members and customers will be central to any decisions made.”
While the CFS position is that no deadline has been set to complete the review, the Financial Times has speculated the process will be completed by the end of the year. The FT said the review, which began shortly after last year’s merger was completed, is being led by CFS Chief Executive Neville Richardson, formerly Chief Executive of Britannia.
Added the report: “Those with knowledge of the sale process said that the background of Mr Richardson and his management team was in selling products through nationwide branches, rather than direct sales, the Co-op’s traditional method of business.
“Should the business be sold, it is expected CFS would concentrate on increasing its 350-branch network to compete with larger national banks.”
The News understands the review does not affect Co-operative Insurance’s general insurance business or Co-operative Bank savings products.