Co-op Bank is putting itself up for sale after it confirmed it expects to report a "significant" loss for the year to December 31, though the bank today stressed that it's "business as usual" for its four million customers and that their money is safe.
Announcing the decision to sell 100% of its shares, the bank said it had been struggling because of low interest rates and the higher-than-anticipated cost of turning the bank around after its near-collapse in 2013. The sale will also affect customers of the Britannia brand, which merged with Co-op Bank in 2009.
As the formal sales process has only just been announced, no buyer has been chosen yet and it's not clear when any potential takeover would be completed.
In a separate statement addressing its customers, the bank said today's announcement has "no direct impact on the products you have with us or the service we provide for you.
"As we go through the [sale] process, it remains very much business as usual," the bank added, stressing that "customers' money is safe".
Co-op Bank customers are protected by the Financial Services Compensation Scheme, meaning up to £85,000 of an individual's deposits are protected if the bank fails.
I'm a Co-op Bank customer – what does it mean for me?
In the short term you'll see no changes at all: the bank will carry on providing its products and services as normal. What will happen in the longer term will very much depend on the terms of any deal agreed with a buyer – though with its ethical standpoint the bank is likely to continue as a distinctive brand.
Though there's no guarantee that a new buyer would honour fixed interest rates on mortgages and savings, past experience shows that fixes tend to be protected. For example, when TSB split from Lloyds in 2013, customers' existing terms were honoured.
If your Co-op mortgage or savings are on a variable rate, they're more vulnerable to change in the event of a sale – though of course, they could go up or down regardless of a sale.
What does the bank say?
Co-op Bank CEO Liam Coleman says: "Since 2013, we have successfully addressed significant legacy issues, reduced the cost base and rebuilt our franchise and customer proposition. The Co-operative Bank delivers an attractive banking proposition that is differentiated by our values and ethics and is highly valued by our four million customers. Customers value the Co-operative Bank and our ethical brand is a point of difference that sets us apart in the market.
"While our plan has been impacted by lower-for-longer interest rates, the costs associated with the sheer scale of the transformation and the legacy issues we faced in 2013, there is considerable potential to build the bank's retail franchise further using the strength of the brand, its reputation for strong customer service and distinctive ethical position."