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.
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by Michelle McGagh on Sep 27, 2016 at 12:00