Co-op Bank CEO £4m pay award
Excessive pay despite mounting losses
Co-operative Bank chief executive Niall Booker was awarded almost £4m last financial year despite losses of more than £611m at the bank.
Booker’s pay rose to £3.85m from £3.1m a year earlier, mainly because of a £502,000 bonus under an annual incentive plan, the bank’s annual report showed.
Booker, a former senior HSBC banker, joined the bank in June 2013 when it was on the edge of collapse. The bank’s pre-tax loss for 2015 widened from £264m in 2014.
£121m in losses came from shedding unwanted assets with costs for compensating customers mis-sold payment protection insurance (PPI) and consumer loans costing more than £100m.
It also said retail banking customer numbers fell by 300,000 last year to 4 million. According to the Guardian the bank will make further losses this year and next.
Elsewhere in the business the bank faired better
The loss at the "long-term core operation" narrowed to £15m from £79m and is predicted to make a profit before the end of 2017.
However the bank said it would take a year longer than expected to reach required levels of capital strength. A revised plan, stretching to 2020, has been approved by the Bank of England’s Prudential Regulation Authority. The Co-op Bank was the only lender in 2014 to fail the Bank of England's key test of capital strength, which assesses the ability of major UK lenders to withstand another financial crisis.
Dennis Holt, the chairman, said Booker had earned his pay:
“You have to understand the context of this bank,” he told the Guardian. “We have experience of taxpayers turning around Lloyds and RBS and others. If you go back to 2013, this bank was on the brink of following them and it was on the brink of being an expense to the UK taxpayer. It was this team who did the necessary work to prevent that outcome and for what this team has achieved their pay has been more than justified.”
Still under scrutiny from campaigners
The bank is currently also under scrutiny for the recent account closures of community groups including Palestinian solidarity groups, the Cuba Solidarity Campaign and others.
The Save Our Bank campaign, which is now transitioning to become the Customer Union for Ethical Banking, has said that the bank is pausing account closures while it reviewed how it communicates to customers whose accounts are being closed.
In a recent statement they added that they have not heard of any more recent account closures but added that they "don’t have a satisfactory explanation of why these accounts have been closed, or a clear sign from the bank that it is changing its approach."
They also say that in the last 12 months the bank has signed up to the Living Wage Campaign, launched a campaign to tackle financial abuse in relationships, been recognised for its stance on nuclear weapons in the Don’t Bank on the Bomb “hall of fame”, and become the only UK bank to support the Paris Pledge to quit coal. Describing this as an "impressive record".
See our ethical shopping guide to Banking Current Accounts.
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