Britannia was 'right deal at time' says ex Co-op chief David Anderson
The former Co-op Bank boss who pushed for the disastrous merger with Britannia told MPs yesterday that it was ‘the right deal at the time’.
David Anderson, who was pushed aside as chief executive after the merger in July 2009, admitted to the Treasury Select Committee that he initiated talks with Britannia.
The hearing came just hours after Co-op Group chairman Len Wardle resigned with immediate effect.
David Anderson is thought to have plotted the merger with Britannia's boss Neville Richardson at a Chinese restaurant in Wilmslow, Cheshire
Wardle said it was ‘right’ to step down as he had been responsible for appointing the bank’s disgraced former chairman Paul Flowers in April 2010.
Asked by Committee chairman Andrew Tyrie whether he took any responsibility for things going ‘disastrously wrong’ at the Co-op Bank, Anderson said: ‘I was responsible for initiating the talks with Britannia about the merger – that was very clearly my responsibility.’
He added: ‘Clearly, it hasn’t turned out as well as we would have wanted and has contributed to the situation that has arisen at the bank.’
Anderson, who now serves on the board of John Lewis, is thought to have plotted the merger with Britannia’s boss Neville Richardson at a Chinese restaurant in Wilmslow, Cheshire.
The Co-op Bank slumped to a £709million loss in the first half of the year, as the bill for bad loans made by Britannia have spiralled. But Anderson, who handed the reins to Richardson, insisted that ‘full due diligence’ was done and that Britannia’s bad commercial property loans did not bring down the bank.
‘We firmly believed it was in the interests of the members of the group,’ he said. He listed a series of other problems which he believed has left the lender battling to plug a £1.5billion black hole in its finances.
These included problem loans in the Co-op Bank’s books and ‘significant management stretch’ when it merged the financial services arm into the group and launched its doomed attempt to buy 632 branches from Lloyds.
Anderson quit with a £1million pay-off and £162,000 in long-term bonuses, many of which paid out early because of the success of the union with Britannia. He was kept on the payroll for an additional five months at a cost of £304,000.
Lord Thurso, the Liberal Democrat peer and member of the Treasury Select Committee, said: ‘Of all the former Co-op bosses who come before us David Anderson has taken the most responsibility for his decisions.’
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