Co-op has secured a £350m lending agreement with six major banks as the group continues its turnaround journey.
The company said the deal with HSBC, Barclays, ING, Lloyds, NatWest and Rabobank reflected “strong market confidence” in its resilience and performance following recent financial successes.
In April, Co-op revealed profits had quadrupled in 2024, with member numbers growing 22% to 6.2 million. However, it also warned of severe headwinds stemming from increased labour costs and other liabilities.
This morning, Co-op added the new banking agreement was a continuation of a strengthening financial picture, with the group successfully raising funding to cover all upcoming bond maturities as they fall due.
It said this represented a “well-funded position with strong partners to 2030” and was “a key step” on Co-op’s journey to sustainable, profitable growth, with much-improved borrowing rates directly tied to ambitious sustainability and social impact targets.
Co-op’s ESG commitments centre on achieving net zero by 2030, with the banking facilities linked to a goal to have 79% of suppliers adhering to the Science Based Targets initiative, reducing approximately 650 tonnes of food waste annually across its operations, and promoting diversity by aligning management representation of women and ethnic minorities with ONS UK population data. These efforts are supported by sustainability-focused supplier partnerships, food waste reduction initiatives, and transparent recruitment practices that reflect the communities Co-op serves.
“This funding arrangement is a powerful endorsement of strength – the renewed financial strength of our Co-op, the strength of our mutual model and the strength of the shared voice of our members,” said CFO Rachel Izzard.
“I’m proud to be building on our existing strong relationships with our banking partners, as well as partnering with new lenders, such as HSBC and a fellow co-operative in Rabobank for the first time.
“By weaving our social value commitments into our funding strategies, we’re able to invest in our Co-op while holding ourselves accountable to our members and their priorities. A heartfelt thank you to all our partner banks for making this possible.”
Nioami Reddington, senior relationship director at NatWest, added: “The Co-op continues to demonstrate strong trading results, a robust balance sheet, growing membership numbers and a resilient operating model. The new £350m term loan – alongside the existing £400m RCF (revolving credit facility) – allows the Co-op to recalibrate its capital structure and to focus on developing its goals, ambitions and strategy.”
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