THE FINANCE DIRECTOR of the Co-operative Group has been forced to resign following the disastrous performance of the supermarkets-to-funerals group’s banking division.
Steve Humes steps down after two years as finance director following a series of crises at the Co-operative Bank, which received a six-notch rating downgrade from rating agency Moody’s two weeks ago and warned that it could need taxpayers’ money to plug a capital hole.
Humes’ departure comes as part of a comprehensive review of the business by new chief executive Euan Sutherland, who joined the company from Kingfisher in May, having been appointed in December last year.
Sutherland instigated the review, which will consider the future of the Co-op’s banking division, last week as the bank announced it would halt lending to new business customers. Nial Booker, the former head of HSBC’s North American operations, has been brought in to head the bank after Barry Tootell was ousted in the wake of the Moody’s downgrade.
According to The Times, the Treasury Select Committee is preparing to hold an inquiry into how the Co-operative Bank was able to develop a capital shortfall of between £1bn and £2bn.
The committee is expected to scrutinise the decision to allow the Co-op Bank to merge with Britannia Building Society in 2008, which brought with it hundreds of millions of pounds of bad debt.
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