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Perspective: Co-operators, let's keep on smiling


As a proud, Co-operative Northerner, me and my family have always banked with the Co-op Bank. Ethical, friendly and innovative, they’ve been a constant thread in our lives. With their firm but fair lending policies, they helped my teenage parents avoid the pitfalls of bad debt, and then helped me avoid developing the gargantuan student overdraft hangover that plagued many of my peers well into their thirties.

Their brilliance and integrity shone in every product:

  • Smile, the first and best internet bank;
  • Green mortgages, providing access to finance for energy improvements and a carbon offset a decade before green deal;
  • Globally leading  business management and reporting where if they made mistakes, they published them.

When other banks were assessing viability for a loan or mortgage against the value of the assets they could seize when things went wrong, the Co-op stuck to its principles, only providing products and amounts  people could really repay. Similarly, when others were eying a quick buck from American sub-prime, or windfalls from fossil fuels, the Co-op bank was asking its customers about their values, and applying them consistently to its decisions. Don’t speculate on the pound, don’t get rich through others' misery, look carefully and thoroughly at customers and investments to make sure decisions are good. Fund financial literacy. Grow organically. When the credit crunch bit in 2008, I was proud, maybe even smug. ‘The way the Co-op makes decisions is vindicated by this mess’.

How can things have gone so wrong?

In the second half of the last decade, there seemed to be a big shift. I was surprised and uneasy when the Co-op merged with Brittania. How can they know the credit of their customers? How can they be sure that their values align with the Co-op, or that the Co-op will keep their loyalty as they switch across? Then I heard about them considering taking on Lloyds TSB. Now I started getting worried. How could the Co-op know the incoming accounts, investments and customers would meet the ethical standards it applied to growing its own book? Could there be a legacy of unfairness the co-op would inadvertently inherit? At the same time, the bank seemed distracted – no new products, poor lending and saving rates, few new innovations. How could the first internet bank be one of the last to market with a banking app? Where are the new products? What’s the game changing co-op green deal that’s also a great deal?

How could the first internet bank be one of the last to market with a banking app? Where are the new products? What’s the game changing co-op green deal that’s also a great deal? 

Now, five years after the rest of the market, the Co-op has hit its crunch. The fat cat, often drug addled investment bankers of the big corporates are clawing its flesh, laughing at its fall from grace. If the last four years at the Co-op bank had been masterminded by a right wing capitalist determined to undermine the only decent bank, they would have struggled to do a better job. Now the ya-boo hiss politicians on all sides are getting stuck in, with the vicarious pleasure of a dowdy girl watching a stunner enter a party with loo roll hanging off her shoe. Their sickening, greasy jostling makes me wish for a new political party that represents something other than self-interest.
But... let’s remember the decades of record profits and success before this hopefully short detour. The things that went wrong were caused by a very small number of people at the top of one part of a very broad Group who bolted rubbish things on to a good business, while the people who work at the co-op, making decisions every day simply got on with their job. I worked for the Co-op for a while, leaving in 2005, and still look back on my time there with pride. It was, and remains an inspiration and an honour to have worked there and the best work experience I expect I’ll ever have.

And what are the alternatives? Mainstream banks that have always been dodgy, where relentless profiteering is endemic at all levels, and where I suspect few would survive a drug screen of their execs, or a bank that’s been briefly led astray by poor, greedy leadership, imported into a work culture that focussed too much on practical delivery at grass roots to notice what the nutters at the top were getting up to. Remember, £1.5 bn is a drop in the ocean compared to the losses at many other banks, who had equally close ties with political organisations.

Maybe a fresh start is needed. If I was running the Co-op I’d sell off the bank, cut my losses, retain the smile brand, and grow a small, beautiful and new banking being using that talented, mid-ranking loyal workforce who has co-operation in their genes. The right customers will come back.

In the absence of another emergent co-operative player in this sector, I’ll be sticking for now with my smile. Lets hope its loyal, ethically motivated customers get chance to shape the future of a smaller, but beautifully formed bank. I’m willing if you are?