KPMG fined over Co-op Bank auditing

The auditing firm KPMG has been fined £5m by the Financial Reporting Council for its failures in properly auditing the Co-op Bank. The fine was reduced to £4m as the firm did not dispute the penalty.

Poor auditing by the firm led to the discovery of a £1.5bn black hole in the Co-op Bank’s accounts shortly after its merger with Britannia in 2009. The bank fell into the hands of US hedge funds shortly after, where it has remained ever since.

Save Our Bank have welcomed the fine imposed on KPMG, however, they say that “it does nothing to address the damage KPMG helped cause. We would rather see the regulator instruct KPMG to work with the bank and its customers to develop a plan to return the bank to cooperative ownership. 

This could work either by finding a cooperative buyer or creating a new customer-owned entity to buy some portion of the shares in the bank.

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