The Co-operative Bank has once again hit the headlines, with speculation mounting that the provider is unlikely to meet its targets, as set out by the regulators.
Following problems in 2013, after the discovery of a £1.5 billion black hole in its balance sheet, the Co-op Bank has been struggling to recover and is currently making a loss. Brexit and the cut in the Bank of England base rate are among the factors that are said to have affected the bank’s ability to return to profit.
The bank has stated that its Common Equity Tier 1 (CET1) – a measure of a bank’s solvency that gauges its capital strength - will fall and remain below 10% in the medium term and that it is unlikely to meet its Individual Capital Guidance by 2020, which is a target that is set by the Prudential Regulation Authority (PRA).
But what does this mean for those holding cash savings with the Co-operative Bank - which also includes accounts held with the bank’s Smile and Britannia brands?
Whilst we can't comment on the stability of Co-op Bank or its future, the first and most obvious step is to ensure, where possible, that funds held with the bank are within the limits set out by the Financial Services Compensation Scheme (FSCS), just for peace of mind.
The good news for savers is that, as of yesterday, the limit was increased to £85,000 per person, per banking licence, meaning that savers have even more protection in place, should the worse happen.
However, there is talk of possible rescue plans, should it come to this and takeovers that could come into play before the bank would be wound down.
If you have any questions or concerns or would like to discuss alternative homes for your cash savings, please get in touch. Call us free on 0800 321 3581 to speak to one of our expert savings advisers, we’d love to hear from you.