Co-op Bank no longer up for sale as rescue plan draws closer

The Co-operative Bank says it is no longer up for sale as a rescue plan with its hedge fund owners is near.

The Manchester-headquartered bank was forced to put itself on the market in February after being unable to reach a strong enough footing to satisfy Bank of England regulations.

In June, it said it was in "advanced discussions" with a group of existing investors about recapitalisation. Now this plan has been “substantially agreed".

The bank, which is 20% owned by the Co-operative Group, was rescued from the brink of collapse by a group of hedge funds in 2013.

Talks are continuing about the separation of the bank's pension fund from the Co-operative Group's scheme. Under the current arrangement, it must carry a share of the Co-op Group's £8bn pension liabilities, which was deterring investors.

Earlier this year, the bank reported its fifth annual loss in a row, although the £477m deficit for 2016 was an improvement on the £610m loss recorded a year earlier.

The Co-op Bank has four million customers and is well known for its ethical standpoint, which its board had said made it "a strong franchise with significant potential" to prospective buyers.