"Co Operative Bank Marketing Strategy - PDF"
The Co-operative Bank plc Trading Statement and Future Board Changes The information set out below has been extracted from the Transfer Statement posted to members of Britannia Building Society (“Britannia”) in connection with the proposed merger of Britannia and The Co-operative Bank plc. The preliminary announcement of 2008 results for The Co-operative Bank plc will be issued on 2 April 2009. Current trading and financial prospects of The Co-operative Bank In the second half of 2008, the profits of The Co-operative Bank have continued to increase, despite difficult market conditions, with increased income, lower costs and lower bad debt charges compared to 2007. Despite investment writedowns in the wholesale business, the full year results are expected to be favourable in the current market conditions. They reflect The Co-operative Bank’s policy of funding customer lending from customer deposits, and a cautious approach to lending. Customer deposits and customer lending from The Co-operative Bank's principal retail and corporate businesses have risen by 20% and 16% respectively during 2008. Co- operative Financial Services centrally holds capital ring-fenced for The Co- operative Bank for various purposes. Early in 2009, The Co-operative Financial Services moved £120 million of capital into The Co-operative Bank as ordinary share capital. This has reinforced the capital strength of The Co- operative Bank on a stand-alone basis as illustrated by The Co-operative Bank’s eligibility for the Government Credit Guarantee Scheme, although given the strong retail funding position any guaranteed issuance is currently unlikely. Higher interest income from balance sheet growth and improved wholesale margins, arising from investment of The Co-operative Bank’s growing deposit base, has been offset by lower retail margins. The Co-operative Bank has reduced its exposure to unsecured lending and offered market leading deposit and term products to further strengthen the balance sheet. This was able to support strong but measured growth achieved in secured mortgage and corporate lending. Mortgages and corporate lending represent a lower credit risk compared to unsecured retail lending and so attract a lower margin. This reflects The Co-operative Bank's continuing marketing strategy which is now focused towards customers who share The Co-operative's values, seeking to build profitable relationships across The Co-operative Financial Services' banking and insurance products. Over the coming years, The Co-operative Bank will be required to contribute an additional levy to the Financial Services Compensation Scheme. This contribution is part of an industry-wide levy which has been raised due to recent banking failures and it is expected that a liability of £10.5 million will be recognised in The Co-operative Bank's financial statements for the year ended 10 January 2009. Future Board Changes The planned future Board of The Co-operative Bank, which is subject to the completion of the merger with Britannia and subject to those individuals all having Approved Persons Status, would be as follows: Non-Executive Directors Robert Henry Burlton (Chair) Rodney Baker-Bates Duncan Bowdler David Wyndham Davies Paul Flowers Peter Harvey Paul William Hewitt Chris Jones Stephen Kingsley Peter Marks Robert Newton Ben Reid Leonard Adrian Wardle Martyn James Wates Stephen Gerald Watts John Piers Williamson Executive Directors Neville Richardson (Chief Executive) Rodney Bulmer Tim Franklin Phil Lee Anthony Jonathan Reizenstein Barry Tootell