Co-op Bank explores options, including sale and IPO

Manchester-based Co-op Bank is in the early stages of exploring strategic options — including mergers and acquisitions, a sale of the bank and an initial public offering (IPO) — according to a Reuters report.

Co-op Bank has been working with advisers at PJT Partners and Fenchurch Advisory to devise ways to create value for its owners, the report said.

Hedge funds including GoldenTree Asset Management and BlueMountain Capital took control of Co-op Bank from previous owner the Co-operative Group via a restructuring in 2017.

BlueMountain later sold a minority stake in Co-op Bank to private equity firms JC Flowers & Co and Bain Capital in 2021.

Later that year Co-op Bank made an offer for TSB Group which was rejected by Spanish parent Banco Sabadell.

Reuters said potential suitors for Co-op Bank could include OneSavings Bank, FirstRand’s Aldermore, Paragon and private-equity-backed Shawbrook.

Last month, Co-op Bank reported profit before tax of £132.6 million for 2022, an increase of £101.5 million.

Total income, which includes net interest income and other operating income, increased 38% to £499.4 million.

Net interest income increased by 41% to £458.3 million “reflecting improving deposit margins following increases in the base rate to 3.5%.”