The Co-operative Group has announced an expected £2.5bn loss for 2013, with the interim group chief executive describing it as a “disastrous year”.
The 2013 loss if almost five times that of 2012, when the group recorded a loss of £529m.
In its final results, published today (17 April), the Co-op Group said heavy losses for the year reflected “significant losses” at the Co-op Bank, loss on the reduction in the group’s shareholding in the bank, an impairment of goodwill which arose on the Somerfield acquisition, reduced food sales and increased central corporate costs.
On 24 March, the Co-op Bank announced a plan to raise capital of £400m. This is in addition to its existing £1.5bn recapitalisation plan, towards which the group last year committed to contribute £333m of capital.
The group has provided £70m to date, with a further £100m due on 30 June 2014, and the remaining £163m to be contributed by 31 December 2014.
When the board of the bank has finalised the structure of its capital raising, the group will decide upon its participation in this exercise.
On 14 March, Lord Myners announced a progress update on his independent Governance Review that had been commissioned by the group board.
Lord Myners is expected to issue his detailed review following the publication of the Kelly Report.
The findings of Sir Christopher Kelly’s independent review into the events that led to the announcement of the bank’s capital action plan are expected to be reported in the week starting 28 April.
The findings will also be reported to members at the annual general meeting on 17 May and put forward as a resolution.
Richard Pennycook, interim group chief executive of The Co-operative Group, said: “2013 was a disastrous year for The Co-operative Group, the worst in our 150-year history.
“Today’s results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years. These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are.”
