So it looks like the Co Op bank might be going tits up.
The ratings agency warned that Co-op Bank might need “external support” as a result of new writedowns on bad debts linked to commercial real estate and belated costs linked to its acquisition of the Britannia Building Society in 2009.
Moody’s calculates that the Co-op Bank’s “problem loan ratio” had increased by the end of last year to 10.9pc from 8.1pc 12 months earlier as it was hit by a deterioration in its commercial real estate portfolio.
Doesn\’t this just show that it really was all those greedy shareholders at fault in The City, wasn\’t it? That rampant short term greed for profits led to the banking system going off the cliff. Things would be so much better with smaller, mutual banks who just would never get into trouble at all.
As the Dunfermline Building Society showed. As the Co Op threatens to.
Worth noting something else: the Co Op has nowhere to go to get that necessary extra capital. You can\’t have a rights issue to your mutual owners…..