James Ashton: Is The Co-op Bank really fixed, or would a split be the better option?

Not for the first time, Vince Cable has a point. Soon after the Co-op Bank announced its restructuring plan last November, the Business Secretary raised the question of whether the organisation could still call itself a co-operative.

Now the bank, whose rescue fund raising backed by hedge funds saw the Co-operative Group’s stake fall to 30%, could have it diluted further if the Co-op can’t stump up the money to support another cash call.

Certainly, the Co-op and its army of spinners have been quick to distance themselves from the banking arm that the group once embraced warmly. The message that the bank was fixed looks a little optimistic today.

The bank’s customers have been a lot more loyal. Deposits have held up remarkably well during this crisis — although boss Niall Booker is giving flimsy details of current trading. It suggests the brand, however tarnished in corporate and political circles, still works with consumers.

But there is a point at which these two organisations should decide whether to go their separate ways. The irony is that the sharp-suited shareholders who effectively saved the bank last year look far better stewards than the amateur squad presiding over the Co-op at the moment. Booker and Co would be well shot of them. But would customers stay put if it rebranded?