Two of the former Manchester based Co-op Bank chiefs have been banded from holding senior roles in the City for life.
Barry Tootell, the former chief executive, and Keith Alderson, who ran the bank’s corporate banking arm were also fined £173,802 and £88,890 respectively, as well as being banned from holding what the regulator calls a “significant influence function” in a regulated firm.
In its ruling The PRA said Mr Tootell “was centrally involved” in a culture at the bank which prioritised its short-term financial position at the cost of it’s long-term capital position. It also said that Mr Tootell, failed to exercise due skill, care and diligence in carrying out aspects of his role.
As for Mr Alderson, the authority says that he didn’t take reasonable steps to ensure the Co-op assessed risk relating to the corporate loan book of the Britainnia building society, which the Co-op Bank merged with in 2009.
It goes on to point out that the bank’s culture led to some staff feeling pressured to meet impairment forecasts previously set, and that Mr Alderson didn’t always ensure such forecasts had been set with reference to the risks within the corporate loan book.
The bank suddenly found that it had a £1.5 billion gap in its finances after it purchased the Britannia Building Society and aborted its plans to buy hundreds of Lloyds branches back in 2013.
Both Alderson and Tootell left the bank later that year and the bank was further embroiled in controversy with the scandal surrounding the drug taking activities of its former chairman Paul Flowers.
The PRA said that Mr Tootell and Mr Alderson breaches of the City rule book had the “clear potential to affect the safety and soundness of the Co-op Bank,” and that “they are not fit and proper persons to carry out a significant influence function at a PRA-authorised firm on the grounds of a lack of competence and capability.”
