Co-op pensioners have turned a corner
Investors have voted in favour of the Co-operative Bank's rescue plan that will see them vote to keep their interest payments, which may pensioners use to top up their pension income, and forgo their capital or receive reduced interest payments but receive some capital back.
Thankfully investors have mobilised to vote in favour of the rescue plan. It may not seem to many that the new rescue plan is still unfair to investors but the only other option would have been a 'no' vote which would have pushed the bank into a taxpayer bailout and investors would have received nothing at all.
While investors may have their minds put at rest by confirmation of what they will receive, there are a number of questions that now have to be answered.
The first is just how a bank that sold itself on its ethical principles could allow pensioners to be thrown into such a state of turmoil and stress. The Co-op knew that 15,000 investors – a large proportion of which are pensioners – relied on that income and it continued to overstretch the company because of ego and greed.
By the time the £1.5 billion blackhole in its balance sheet was announced, the management team at the bank had been warned time and time again that it needed to increase capital and still it continued to press ahead with projects that were capital intensive and eventually pushed the bank to the brink.
It shows gross negligence to do what it did but it also shows a lack of respect for the investors that believed they were doing the right thing by putting their money into an ethical organisation and by trying to provide themselves with extra income in old age.
Thankfully the negotiations with the bank are over but what about those pensioners who are now revising their budgets and wondering just what it is they should cut in order to cover the loss they are suffering from Co-op bank's ineptitude.
The Co-op has an enormous amount of questions to answer and while it may not have to face investors again, it will have to face the regulator and further grilling by MPs. Whether we get to the truth about what happened at this ethical bank remains to be seen.