The Co-operative Bank plc’s chief executive, Barry Tootell has resigned following the bank’s downgrade by ratings agency Moody’s.
He has been replaced by Rod Bulmer, until a replacement is recruited.
Moody’s Investors Service yesterday downgraded the deposit and senior debt ratings of Co-operative Bank plc to Ba3/Not Prime from A3/Prime 2, following its lowering of the bank’s baseline credit assessment (BCA) to b1 from baa1. The equivalent standalone bank financial strength rating (BFSR) is now E+ from C- previously.
The agency said the lowering of the BCA reflects Moody’s opinion that the bank faces the risk of further substantial losses in its non-core portfolio, as demonstrated recently by the unexpectedly significant deterioration of its commercial real estate (CRE) exposures, that will exert downward pressure on capital ratios that are already low relative to its peers’.
It was also concerned that its vulnerability to losses is heightened by the low level of provisions held against its lending portfolio and that the bank’s slow progress in realising merger-related revenue and cost benefits has diminished its ability to replenish capital through earnings.
Tootell was responsible for the proposed acquisition of 632 branches from Lloyds Banking Group – project Verde = which collapsed last month.