The Manchester-based Co-operative Group have revealed record losses of £2.5billion for 2013, marking the worst year in the company’s 150-year history.
The figure is almost four times that of 2012, largely due to unpaid corporate loans, staff conduct issues and failed computer development projects.
The vast majority of the losses stemmed from the Co-operative Bank, which totalled £2.1billion.
Trading losses of £1.44billion were reported for the year to December, when the group lost control of Co-op Bank to US hedge funds.
The group took another hit of £625m when it handed over 70% of the bank’s shares to bond holders, and were also forced to lower the valuation supermarket chain, Somerfield, to £226million.
Richard Pennycook, Interim Group Chief Executive, said: “2013 was a disastrous year for The Co-operative Group, the worst in our 150-year history.
“Today’s results demonstrate that but they also highlight fundamental failings in management and governance at the Group over many years.
These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are.”
He added that the Group is now ‘very publicly at a crossroads’ and that they had undertaken ‘a fundamental review of the purpose of our organisation’.
Ursula Lidbetter, Chair of The Co-operative Group, said: “During 2013, it became apparent that our governance had fallen far short of the standards to which we aspire as a co-operative society.
“Now is the time to put that right through fundamental reform – we have to act with urgency if we are to lay the foundations for a stronger, healthier co-operative business in the future.
Image courtesy of Kaihsu Tai, with thanks.
