Co-op Group, the Manchester-based mutual, has announced a new £350 million lending agreement with six banks — HSBC, Barclays, ING, Lloyds, NatWest and fellow co-operative Rabobank.

“The deal reflects strong market confidence in the group’s continued resilience and performance, and follows a series of financial successes,” said Co-op Group.

“In April, Co-op shared a solid set of annual results, reporting a 35% increase in underlying operating profit, and returning ‘back to the black’ for profit before tax for the first time since 2020.

“These achievements were powered by a renewed focus on member-ownership, where member numbers grew by 22% to 6.2 million across the year.”

In April, Co-op Group said its 2024 profit before tax rose by £133 million to £161 million “driven by increased operating profits and improved Funeralcare plan investment returns” as its revenue for the 52 weeks to January 4, 2025, was maintained at £11.3 billion.

With more than 2,300 food stores, 800 funeral homes and a wholesale business supplying around 6,000 additional outlets, Co-op Group employs 54,000 people.

Co-op Group added: “Reflecting this improved position, Co-op’s credit rating was upgraded by Standard & Poor’s in late 2024. The group also successfully renewed and extended its backstop undrawn revolving credit facility by five years. 

“The new agreement is a continuation of this strengthening financial picture for Co-op, with the group successfully raising funding to cover all upcoming bond maturities as they fall due. This represents a well-funded position with strong partners to 2030.

“The deal is a key step on Co-op’s journey to sustainable, profitable growth with much-improved borrowing rates directly tied to ambitious sustainability and social impact targets …

“Among the lenders is Rabobank, a Netherlands-based co-operative bank with agricultural heritage. The announcement comes during the UN’s International Year of Co-operatives, further highlighting the relevance and resilience of the co-operative model in modern, international economies.”

Co-op Group chief financial officer Rachel Izzard said: “This funding arrangement is a powerful endorsement of strength – the renewed financial strength of our Co-op, the strength of our mutual model and the strength of the shared voice of our members.

“I’m proud to be building on our existing strong relationships with our banking partners, as well as partnering with new lenders, such as HSBC and a fellow co-operative in Rabobank for the first time.

“By weaving our social value commitments into our funding strategies, we’re able to invest in our Co-op while holding ourselves accountable to our members and their priorities. A heartfelt thank you to all our partner banks for making this possible.”

Francesca Mosca, Head of Corporate Sector Coverage UK at ING, said: “As a core lender to the Co-op group, ING is proud to support their latest £350m sustainability-linked financing. This collaboration underscores our commitment to driving sustainable growth and we look forward to continuing our dialogue with Co-op as they advance their sustainability and social impact goals.”

Nioami Reddington, Senior Relationship Director, NatWest, said: “NatWest is delighted to be able to support the Co-op in its most recent financing agreements, acting as Facility Agent and Mandated Lead Arranger to its new sustainability linked £350m Term Loan.

“The Co-op is a highly valued and long-standing client of NatWest, whose values are closely aligned to our own.  The Co-op continues to demonstrate strong trading results, a robust balance sheet, growing membership numbers and a resilient operating model.  

“The new £350m Term Loan – alongside the existing £400m RCF – allows the Co-op to recalibrate its capital structure and to focus on developing its goals, ambitions and strategy. We look forward to continuing to collaborate with the Co-op as a key funding partner for the future.”   

Fiona Parkes, Relationship Director at Barclays UK Corporate Banking, said: “We are delighted to continue supporting our longstanding client Co-op. This funding is an example of our commitment to facilitate $1trn of Sustainable and Transition Financing globally by 2030.

“We’re proud to be backing UK businesses through our £22bn Prosperity Fund and look forward to helping more clients invest for growth in communities across the country.”

Renée Marais of Rabobank said: “We are delighted to support the Co-operative with this new facility. It is a particular privilege, given our shared status, focus on Food & Agriculture and aligned values, to join the banking group during the UN’s International Year of Co-operatives.”