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Co-op hedge fund 'rescue' threatens jobs and branches

50 branches and at least 1,000 jobs to be axed

The Co-operative Bank announced plans yesterday to axe 50 branches and at least 1,000 jobs as part of a "rescue" deal following disastrous losses.

And as reported in the Morning Star yesterday, the plan includes investment by "hedge funds" which will have a 70 per cent interest in the company.

The bank revealed this year a £1.5 billion financial "black hole" following two disastrous attempts at expansion - the takeover of Britannia Building Society and a bid for 600 branches of Lloyds Bank.

Customers have launched a "Save Our Bank" campaign with the aim of ensuring that the bank's ethical investment policy continues.

The policy guarantees that customers' money is not invested in activities such as the manufacture and trade of arms or tobacco, and firms which exploit developing countries.

Co-op Bank yesterday issued a statement saying the policy would continue and be enshrined in the bank's constitution.

But despite the assurance, trade union Unite said it believed the policy is in jeopardy - and expressed dismay at the "rescue" plan.

Unite national officer Dominic Hook said: "This disastrous Co-operative Bank deal is everything but a rescue plan. This proposal will suffocate the Co-operative Bank and leave it unrecognisable.

"Allowing these hedge funds to control the bank will eliminate the meaningful ethical ethos which thousands of its customers value so much.

"Investors must not stand back and allow the unique culture of the Co-op Bank to be lost.

"The past disastrous mismanagement of the Co-operative Bank has now left thousands of staff worried about losing their jobs."

A confrontation over alleged failings by senior management is expected between bosses of the Co-op Group - which oversees all the Co-op's business operations such as food and pharmacy - and delegates at the group's half-yearly meeting in Manchester on Saturday.

Campaigners' long-term aim is now to win back the bank's mutual status, through which it would be controlled from the bottom by customers.


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