A rescue of the Co-operative's troubled banking arm has been launched in a move that will see investors help fill a £1.5 billion hole in its balance sheet.
No taxpayers' money will be involved in the plan, with bondholders forced to take losses on their investment as part of a "bail-in" due to happen in October. They will be offered shares in the banking arm, a move which will result in a stock market listing for the UK's biggest mutual.%VIRTUAL-SkimlinksPromo%
The Co-op said that around 5% of the bondholders were smaller retail investors - a figure thought to number 7,000 - and whose average investment was around £1,000.
The black hole in the Co-op's capital reserves largely stems from commercial property loans acquired through a merger with the Britannia building society in 2009 which created a financial ''super-mutual''.
Concerns over its financial position came to a head last month after credit ratings agency Moody's downgraded the bank to junk status, just weeks after it had pulled out of a deal to buy more than 600 Lloyds branches. As a member-owned institution, the Co-op is hamstrung in its ability to raise fresh capital.
The Co-op, which has around 4.7 million banking customers, is also planning to raise funds through the disposal of its insurance business, although the largest part of the rescue is coming from bondholders.
The shortfall was identified by the Prudential Regulation Authority (PRA), the new City watchdog. It is due to set out further details on the capital positions of all eight major banks and building societies in a briefing on Thursday. It launched its review after the Bank of England's new Financial Policy Committee claimed that banks needed another £25 billion of capital to prop up their balance sheets.
However, Lloyds Banking Group and Royal Bank of Scotland have already agreed with the PRA that their requirements will be met without having to raise funds through the issue of new shares or securities.
Co-op chief executive Euan Sutherland, the former B&Q boss who joined the group last month, said the long-term plan was to now focus on retail customers. He told the BBC Radio 4 Today programme: "I think we are really strengthening the group right now and we have put in, in a very short time, a very strong management team and we have got a very clear plan to drive a very successful future for this bank going forward.
"Clearly there are lessons to learn and clearly there will be a time to look back and do that but, to be honest, in the last six weeks, where I have been involved with the Co-operative group, we have focused on driving a very solid future for this bank. In effect this is the best solution for all concerned. It's a very equitable solution and we believe that this will provide security, safety, stability for our customers and the bank going forward."
10 things we hate about our banks
Bail-in plan to rescue Co-op's bank
More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.
The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!
(Pictured: Martin Lewis after the PPI payout ruling)
Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.
Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.
While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.
You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.
Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.
A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!
While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.
Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.
If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.
The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.
Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.
In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.
"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."
The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.
When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.
When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.
Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!
The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.
About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.