CO-OPERATIVE Group has made more moves to help turn around its banking business with the hiring of Richard Pennycook, who lost out on the top job at supermarket chain Wm Morrison, as group finance director and the recruitment of former Alliance & Leicester chief Richard Pym as chairman of its bank.
The announcement was made just weeks after Edinburgh-born Euan Sutherland joined the mutual as chief executive in the wake of a six-notch credit rating downgrade of its banking arm and its failure to complete the purchase of 632 branches from Lloyds Banking Group.
Mr Pym will continue to chair UK Asset Resolution, which looks after the nationalised toxic assets formerly held by Northern Rock and Bradford & Bingley.
He replaces the existing chairman of Co-op's banking business, Paul Flowers, who is stepping down after three years in post. The exit of Mr Flowers, a Methodist minister and former councillor in Bradford, follows the departure of the bank's chief executive Barry Tootell last month.
Niall Booker, a Scot who was previously an executive at HSBC, will take up his role as the bank's new chief executive next week.
Mr Pym's appointment is a signal that Co-operative continues to back its bank despite withdrawing from new business lending as it seeks to meet regulators' demands for strengthened capital cushions.
Mr Pym said: "We are clearly focused on actions to strengthen the bank's balance sheet and resolving the current underlying issues. This will allow us to continue to provide customers with an alternative choice to the traditional banks.
"The British banking system is very concentrated, with a small number of institutions, and it is important that the Co-operative Bank plays its full part in maintaining a competitive landscape for customers."
Mr Pennycook joins Co-operative after nearly eight years as finance director at Morrisons. He was a contender to be chief executive at the Bradford group three years ago when Marc Bolland defected to Marks & Spencer but instead the group appointed Dalton Philips.
But Mr Pennycook was given a beefed up role that encompassed information technology, strategy and online development but announced his intention to quit last summer.
He said: "I am delighted to be joining the Co-operative Group to help drive its development. With its strong brand and loyal customer base, the group is ideally positioned to address the challenges it now faces."
Co-operative Group chairman Len Wardle said: "We now have a formidable top team with exceptional financial, strategic and operational expertise across retail and financial services."
Co-operative Bank, whose customers include Celtic Football Club, is seeking to boost its capital position through asset sales.
Royal London's policyholders this week approved the purchase of Co-operative's life assurance business. Co-op also plans to sell its general insurance business.
Because Co-op is owned by its members, including 475,000 in Scotland, it cannot simply issue shares to raise more money. A deal to buy a portfolio of branches, including Lloyds TSB Scotland, from Lloyds would also have helped to boost its capital position as well as its position in Scotland, where it only has four outlets, but this fell through in April.
Co-operative Group employs more than 11,000 people in Scotland, most at its 400 food stores.
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