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Co-op caught in unpaid fund manager bonus storm
by Dylan Lobo on Aug 12, 2013 at 08:00
The Co-operative Bank is facing more trouble as fund managers in its former asset management and insurances divisions look to reclaim unpaid bonuses.
According to The Times the payouts, which when combined amount to more than £1 million, were supposed to have been paid to employees within the two divisions, which were sold to Royal London earlier this year. The paper said the demands relate to 10 individuals.
The UK’s largest mutually owned business made a loss of £599 million in 2012, forcing it to sell the businesses to improve its capital position.
The loss was mainly confined to its banking business, where bad loans tripled and it was forced to set aside around £150 million to cover mis-sold PPI.
The bank subsequently launched a £1.5 billion recapitalisation plan, allowing junior bondholders to exchange the debt assets into shares in a bid to shore up its balance sheet.
Moody’s had little faith in the plan as it downgraded the bank in the aftermath saying a default was ‘imminent’.
Against this difficult backdrop, the fund managers are arguing they performed well said The Times, meaning they should be entitled to their bonus.
The fund range includes the top performing CIS Sustainable Leaders and CIS Sustainable World Trust , managed by Citywire A-rated Michael Fox, although it is not known whether he is among the 10 employees fighting for their bonus.
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