Co-op Bank marks profit with £1 million for leaving boss

The Co-op Bank handed its most recently departed chief executive a £1 million severance package, it emerged on Thursday, just as the “ethical” lender reported its first profit in six years.

The annual report reveals a £1.13 million pay-off for one individual, thought to be Liam Coleman, who left last June after five years. Including his salary, Coleman was paid about £3 million.

Coleman oversaw the sale of the bank to New York hedge funds, a deal that saved the Co-op Bank from collapse but appeared to compromise its marketing stance as a moral lender aiming to do good for society.

That image had already taken a hit when it emerged in 2013 that former chairman Paul Flowers had used company phones to listen to sex lines and pleaded guilty to possession of cocaine, crystal meth and ketamine.

Under new chief executive Andrew Bester, the Co-op Bank made an operating profit for 2018 of £15 million. Adding in costs for IT and PPI mis-selling it made another loss of £141 million.

Bester, paid more than £1 million himself, was bullish. “We have made sizeable progress getting the bank back to good health,” he said. He claims The Co-op is the “best capitalised” of the challenger banks and is now in a position to chase new small-business customers. It has 85,000 and hopes to grab customers leaving RBS.

Bester, the fifth chief executive in seven years, said last year was the best for mortgage completions since 2010.

He said a competitive market and political uncertainty has created an “extremely challenging banking environment”.

The Co-op Bank is expected to launch a fresh marketing campaign in April.

Bester said: “With a lack of distinctive challenger brands, our commitment to the values of the co-operative movement continues to set us apart and 2019 will see renewed brand investment.”