Prudential Regulation Authority bans former Co-operative Bank bosses from the City for life and fines them more than £250,000
The Prudential Regulation Authority (PRA) has banned two former Co-operative Bank bosses from holding senior City positions and slapped them with fines of more than £250,000 over failings when they were running the bank.
In a statement today, the PRA said it had banned former chief executive Barry Tootell and Keith Alderson, the former managing director of the Co-op's corporate and business banking division, from holding a "significant influence function in a PRA-authorised firm".
The regulator also fined Tootell £173,802, saying that between 1 August 2009 and 1 October 2012, he "did not take adequate steps to ensure that the Co-op Banking Risk team, for which he was ultimately responsible, was properly structured and organised to enable it to provide proper independent challenge and guidance to the first line business for the Co-op Bank".
Meanwhile, Alderson was fined £88,890. The PRA said he "did not take reasonable steps to ensure that Co-op Bank adequately assessed risk arising across the Britannia Corporate Loan Book" and " did not escalate specific risks inherent in the Britannia Corporate Loan Book sufficiently clearly to Co-op Bank’s formal risk management processes".
The Co-op took over the Britannia Building Society in 2009, in effect saving it from collapse. But in April 2014 a review by Sir Christopher Kelly found the merger "should never have happened". The size of Britannia and its commercial loan book created complications for the Co-op, which led it to admit to a massive £1.5bn black hole in 2013.
Kelly, who was appointed to investigate the bank after a disastrous appearance before MPs by Co-operative Group chairman Paul Flowers – also known as the "Crystal Methodist" after he was filmed taking Class A drugs – kicked off a series of events which led to Co-operative Bank shareholders taking a haircut on their investments.
A spokesman for the Co-op said: "The findings relate to previous management and the current management team continues to progress the turnaround, having raised additional capital, achieved considerable de-risking and improved brand metrics."