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Co-op Bank debt rating downgraded by Moody's Co-op Bank debt rating downgraded by Moody's
(35 minutes later)
Ratings agency Moody's has downgraded the Co-operative Bank's debt rating, citing fears that it is not well enough protected against potential losses. Ratings agency Moody's has downgraded the Co-operative Bank's debt rating to "junk" status, citing fears that it is vulnerable to potential losses.
The agency warned that the bank may need "external support" if it could not strengthen its balance sheet.The agency warned that the bank may need "external support" if it could not strengthen its balance sheet.
The Co-op said it was "disappointed" with Moody's decision. The Co-op said it was "disappointed" by Moody's decision.
The news preceded the resignation of chief executive, Barry Tootell, following the bank's failure to buy 630 branches from Lloyds Banking Group.The news preceded the resignation of chief executive, Barry Tootell, following the bank's failure to buy 630 branches from Lloyds Banking Group.
Mr Tootell will be replaced temporarily by Rod Bulmer, the bank said.Mr Tootell will be replaced temporarily by Rod Bulmer, the bank said.
'Clear plan''Clear plan'
Responding to the Moody's downgrade, the Co-op said it had a "strong funding profile" which was "significantly above the regulatory requirements." Responding to the Moody's downgrade, the Co-op said it had a "strong funding profile" that was "significantly above the regulatory requirements".
But in a statement, the bank admitted there was a "need to strengthen our capital position in light of the broader economic downturn and the pending introduction of enhanced regulatory requirements".But in a statement, the bank admitted there was a "need to strengthen our capital position in light of the broader economic downturn and the pending introduction of enhanced regulatory requirements".
"We have a clear plan to drive this forward throughout the coming months", it added. It added: "We have a clear plan to drive this forward throughout the coming months."
These plans include selling off its life and general insurance businesses, and simplifying its operations.These plans include selling off its life and general insurance businesses, and simplifying its operations.
In March, the Co-op Bank reported annual losses of £674m.In March, the Co-op Bank reported annual losses of £674m.