HSBC veteran Niall Booker to lead troubled Co-op bank
The Co-operative Group has hired a former senior HSBC director to take charge of its struggling banking arm.
Problems at the Co-operative have led to a number of senior departures Photo: Alamy
By Philip Aldrick
2:48PM BST 27 May 2013
Niall Booker, 54, who was head of HSBC’s North American operations until a management shake-up in 2011, is joining the mutual as chief executive of the Co-op Bank and deputy chief executive of the entire supermarkets-to-funerals group.
His immediate job will be to fix the problems in the banking arm, which is believed to be facing a capital shortfall of between £1bn and £1.5bn and has ceased new business lending. The hire is also likely to scotch speculation that the bank will be sold or shut down.
Euan Sutherland, group chief executive, said: “The Co-operative Bank has a strong future. We will build on our strengths as a member-owned bank, with a loyal customer base and an ethical heritage... Niall will add tremendous value.”
The group is working with regulators to find a solution to its capital problems. A three-pronged strategy is currently being explored that is likely to see both the lender and the group sell off businesses, and the bank’s £1.3bn subordinated bondholders take a hit.
Co-op Bank preference shares have already collapsed in value. Its permanent interest bearing shares, which are often held by retail investors, could also be under threat.
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Mr Booker left HSBC after leading the successful restructuring of its disastrous US sub-prime division. He had been with the bank 30 years and held several senior roles, drawing a pay package reported to be around £2m in his final year at the bank.
He said: “There are no quick fixes here, but ... I am confident we will be able to stabilise and develop the franchise.”
Mr Sutherland is expected to stregthen the management team further in the coming days with more senior hires at both the group and bank level.
The Co-op has seen a series of senior executives quit in the wake of disastrous results and a credit downgrade to "junk" by Moody's earlier this month, when it also suggested the bank might need state support. Steve Humes, finance director of the supermarkets-to-funerals group, was the latest to quit along with Jim Slack, chief information officer at Co-op Bank.
Bank boss Brian Tootell quit after the division’s credit rating downgrade.