LONDON – Britain's Co-operative Group is splitting its bank into a 'good bank' and 'bad bank' and will hive off toxic loans worth about 14.5 billion pounds ($22.73 billion) to be wound down or sold off, the company said on Monday.
The Co-op also said there is leeway for additional capital provisioning within its rescue plan, which the company is undertaking to plug a 1.5 billion pound capital hole.
Earlier on Monday the Co-op said it had agreed on a plan which forces bondholders to pay part of the bill.
The future of the bank, which has 4.7 million customers, has been in question since Moody's cut the lender's credit rating to junk status and warned it might need taxpayer support - a suggestion the bank has denied.
(Reporting by Matt Scuffham & Tommy Wilkes; Editing by Sinead Cruise)