The Co-operative Banking Group has insisted it has strong funding profile and high levels of liquidity despite being downgraded to ‘junk’ status by Moody’s.

The Co-operative Group’s banking arm was downgraded amid fears it could be vulnerable to potential losses. The bank’s CEO, Barry Tootell, has resigned.

In a statement today, Co-op Bank said its funding profile was “significantly above the regulatory requirements”.

“We do acknowledge, like the rest of our banking sector peers, the need to strengthen our capital position in light of the broader economic downturn”

Co-op Bank

“We do acknowledge, like the rest of our banking sector peers, the need to strengthen our capital position in light of the broader economic downturn and the pending introduction of enhanced regulatory requirements, and we have a clear plan to drive this forward throughout the coming months,” it said.

“In March, we announced the sale of our life business to Royal London and also our intention to sell our general insurance business. In addition to these measures we plan to significantly simplify our business, which will greatly improve our operational effectiveness and also enhance our capital position in the process.”

In a tweet this morning, the Co-op Bank said: “In light of today’s news, we would like to reassure customers and members that we haven’t sought nor do we need government support.”

It comes just two weeks after the bank revealed it was pulling out of a deal to acquire 632 Lloyds Bank branches because it “was not in the interests of the Group’s members to proceed further at this time”.

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