The Co-operative Bank has suspended loans to new business customers as part of a drive to manage its capital.
On Friday, the Co-operative Group, which is the parent organisation of the Bank, said it was reviewing its capital and lending position and said the decision to move away from corporate customers, and focus on retail, was made in March.
The Group’s new Chief Executive Euan Sutherland said: “This decision is part of our commercial strategy to play to the traditional strengths of the bank. It will enable us to focus our energies and capital on both supporting our existing corporate customers and on growing our presence in the retail banking market.”
Earlier this month Moody’s downgraded the Bank’s debt ratings by six notches following analyst fears that the Bank’s capital hole could be as high as £1.8 billion.
Industry regulators are telling banks to strengthen its capital holding; and in response to this the Co-operative Group announced the sale of its life business to Royal London and has put the general insurance business on the market.