LONDON (Reuters) - Britain’s Co-operative Bank said on Tuesday it had completed a 400 million pound ($672.10 million) fundraising to bolster its capital after shareholders approved the transaction, which was 2.5 times oversubscribed, at a general meeting.
“This capital will strengthen the bank for our customers and will assist in the implementation of our four to five year business plan to return to our roots as a bank focused on our retail and SME customers,” a Co-op Bank spokesman said.
The latest capital raise will see the Co-operative Group’s (42TE.L) stake in the bank fall to 20 percent. The group owned the bank outright until last year when it fell under the control of bondholders, including U.S. hedge funds, after a 1.5 billion pound ($2.5 billion) funding gap was exposed.
That raised fears from some customers that its ethical stance, which include not lending to companies such as weapons makers, could be compromised.
In an attempt to reassure customers, the bank’s new owners installed commitments to values and ethics into the bank’s Articles of Association.
Co-op Bank on Tuesday appointed Laura Carstensen, a former deputy chairman of Britain’s competition watchdog, to chair a committee set up to safeguard its ethical principles.
Carstensen, formerly a partner at legal firm Slaughter and May, will join the board of the Co-op Bank as a non-executive director and will lead the ethics committee.
“It is vital for the UK banking system, for society and for The Co-operative Bank that values and ethics is at the heart of what we do,” Carstensen said in a statement.
($1 = 0.5936 British Pounds)
Reporting by Matt Scuffham, editing by Louise Heavens and David Evans