Co-operative Bank praised for handling of hedge fund takeover

The Co-operative Bank has gone to lengths to emphasise it will stick to ethical banking despite a number of hedge funds taking control of the company from the Co-operative Group today.

Co-operative Bank: now owned by hedge funds
Co-operative Bank: now owned by hedge funds

The bank has attempted to ensure customers are aware part of the deal was a pledge to only do ethical business being added to the bank's constitution.

Co-operative Group head of public relations Russ Brady said the investors recognised the value of the bank was in its principles.

"We wanted to make it absolutely clear that the bank is continuing with its values and ethics," he said.

Co-operative Group chief executive Euan Sutherland has recorded a video message on YouTube to customers as well as conducting a number of interviews.

To reinforce the message, the bank has placed adverts in today's national newspapers with the line: "Ethical banking has always been in our DNA. Now it’s in our constitution."

A group of hedge funds that owned some of the bank's debt has taken control of 70 per cent of the bank's shares from the Co-Operative Group, after the bank got into financial trouble and needed to be recapitalised.

Tulchan is the Co-operative Group’s retained financial agency and has been advising it throughout the process.

Weber Shandwick managing director of corporate, financial and public affairs Mary Whenman said that considering the bank was in the "last chance saloon", the coverage could have been a lot worse than it has been.

"The main issue for customers is that ownership is now in the hands of hedge funds and adding the ethical element to the constitution is absolutely right and is coming across very clearly in the coverage."

ReputationInc group CEO John Mahony added: "Customers, investors and stakeholders will stay committed to the future if the bank stays committed to its promises from a values and ethics perspective. The CEO, Euan Sutherland, set the right tone by being visible around leading the change process, which is what we have come to expect from modern reputation leaders."

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