Thursday, 21 September 2017

Co-op Group sells off last 1% stake in Co-op Bank



The Co-operative Group has sold off its final 1% stake in the Co-op Bank, meaning it no longer has any investment in the business.

The news was included in the Group's interim results, which also revealed that the company's profits had dropped as a result of a poor performance by its Insurance arm.


The Co-op Group encompasses five businesses: Co-op Food, Co-op Insurance, Co-op Electrical, Co-op Legal Services and Co-op Funeralcare.


The Co-op Bank was previously also entirely owned by the Group, but was spun off after a black hole in the lender's balance sheet forced it to seek outside investment.


The bank again put itself up for sale in February of this year amid concerns it didn't hold enough capital to survive another financial crisis.


It agreed a £700m rescue deal with US hedge fund investors in June that allowed it to continue as a stand-alone business, but saw the parent group's stake reduced from 20% to just 1%.


The Co-op Group has now sold off its last remaining holding in the bank.
 
 
No details were provided regarding who has acquired the shares, but the Co-op Group raised around £5m from the sale.


Elsewhere in the report the Co-operative Group revealed that its underlying profit before tax had plummeted by 48% in the first half of the year, mostly due to a £12m drop in profits in the Group's Insurance business.


When one-off items such as the sale of the Co-op Bank shares are taken into account the profit before tax rose by 47% compared to the same period last year.


The Co-op also noted that revenues in its funeral care business had risen, mostly driven by the increased popularity of its low-cost 'Simple Funeral' offer.


The 'Simple' option affords families a no-frills experience and includes transport and care of the deceased as well as arrangements for a burial service, but doesn't cover embalming of the body or allow the family to choose the time or date of the funeral.


The Group's food arm reported sales of £3,476m, broadly in line with the first half of 2016, with like-for-like sales rising by 3.5%.




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