Co-Op Bank New Chairman Richard Pym: Working with Regulator to Resolve Bailout Concerns

The Co-Operative Bank's newly appointed Chairman Richard Pym revealed that the group is working with the British prudential watchdog to address rating agency concerns that the lender may need a bailout.

Pym, who runs a bailed-out banking division for the government, said the bank is "working very closely with the Prudential Regulation Authority (PRA) to resolve questions that have been asked."

"The bank's financial performance has been a disappointment. I've run good banks and bad banks and I have confidence that the Co-op will be a very good bank. There is an absolute determination to resolve the questions that have been asked with our regulator," he said in a press interview.

Today, the Co-Op Group also announced its new finance director for its troubled banking arm, Richard Pennycook.

Pennycook is the finance director of the supermarket chain Morrisons.

The Co-Op Bank is one of UK's smallest banks with 6.5 million customers and a 1.5% share of the current account market. However it is a household name in Britain, as the wider group includes supermarkets, funeral services and pharmacies.

Earlier this month, Moody's slashed the bank's debt rating to junk status, due to concerns that the Co-operative Bank has a £1.8bn (€2.1bn, $2.7bn) black hole in its balance sheet.

Responding to the downgrade, the bank acknowledged that it needed to strengthen its capital position in the light of the broader economic downturn and the pending introduction of additional regulatory requirements.

It has until the end of June to agree a rescue plan with the PRA to plug a capital shortfall.

Pym and Pennycook are the latest new appointments to the embattled bank's management team.

Following the dire rating's agency assessment, Barry Tootell stepped down as CEO, however former HSBC banker Niall Booker has since taken over as leader.