View the article online at http://citywire.co.uk/money/article/a874012
Former Co-op Bank bosses banned and fined £260,000
Former Co-op Bank bosses Barry Tootell and Keith Anderson banned from working in financial services and handed combined £263,000 fine.
The Prudential Regulation Authority (PRA) has fined and banned two former Co-op Bank executives over management failings which nearly led to the collapse of the lender in 2013.
Former Co-op Bank chief executive Barry Tootell (pictured) has been fined £173,800 and banned from holding any position of significant influence in a PRA-authorised firm.
The PRA also fined Keith Alderson, who was managing director of Co-op Bank’s corporate and business banking division, £88,900. He has also been banned from holding a position of significant influence in a PRA-authorised firm.
The bans mean Tootell and Alderson cannot hold senior positions in any bank, life company or major investment firm.
The Co-op bank almost collapsed in June 2013 when a £1.5 billion capital shortfall was revealed.
According to the PRA, Tootell was ‘centrally involved’ in a culture at the bank which prioritised the short-term financial position of the bank over its long-term capital position.
It also said that he did not ensure the Co-op Bank risk team was structured well enough to allow it to challenge the bank’s business policies.
The PRA said it fined Alderson because he did not take reasonable steps to ensure the Co-op Bank assessed risk across the Britannia corporate loan book, which the bank acquired in 2009. In April 2014, the acquisition was blamed for the collapse of the bank.
It added Alderson did not raise concerns about the deal through the banks’ formal risk management process.
Andrew Bailey, chief executive of the PRA, said Tootell and Alderson put the future of Co-op Bank at risk by failing to take the right action.
‘Banks that are not well governed have the potential to pose a threat to UK financial stability,’ he said.
‘The actions of Mr Tootell and Mr Alderson posed an unacceptable threat to the safety and soundness of the Co-op Bank which is why we have decided a prohibition is appropriate in these cases.’
The fines followed an investigation by the PRA and the Financial Conduct Authority into the actions of senior directors at the bank.
News sponsored by:
After Boris announced he was backing Brexit, sterling suffered its biggest slump in six years. Our Market Mavens discuss. Follow the Market Mavens LinkedIn page for weekly videos, in which our panel of industry experts share their views on financial news
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
More about this:
More from us
- Co-op Bank escapes fine from regulators
- Bank Stress Test: Co-op fails but RBS and Lloyds scrape by
- MPs say Co-op leadership was 'accident waiting to happen'
- Embattled Co-op unveils restructure plans
- Co-op bank: bad management and Britannia merger to blame
- Q&A: what next for the Co-op?
- Co-op Bank posts record £1.3 billion loss
- Co-op timeline: how it all went wrong
- Co-op scandal: Sex, drugs and a bank failure
- Co-op faces new challenge over £1.5bn rescue
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add email@example.com to your safe senders list so we don't get junked.
by David Kempton on May 24, 2016 at 17:15