Analysts at Barclays have argued that the shortfall facing the lender may be as large as £1.8bn \”in a stressed case\”, which is much greater than previous estimates of £1bn.
\”The capital shortfall at the Co-Op Bank is likely to be sizeable,\” the Barclays experts said.
\”The key driver of the shortfall is the losses arising from the non-core corporate book, which consists primarily of UK commercial real estate exposures inherited from Britannia. We assume portfolio losses of 35pc in a base case and 50pc in a stressed case and base these assumptions on recent market transactions of comparable portfolios.\”
And they haven\’t got any shareholders they can sting for a rights issue either.