Ex-HSBC Banker Niall Booker Replaces Co-Op Bank’s CEO Barry Tootell

Former HSBC banker Niall Booker has taken over as leader of Britain's Co-operative Group, after ex-CEO Barry Tootell stepped down in the wake of suggestions by ratings agency Moody's that the Co-op's banking operation may need a government bailout.

Booker will take charge of the group's finance arm Co-operative Bank, and become deputy chief executive of The Co-operative Group, on 10 June.

He was previously the head of HSBC's North America business until stepping down in 2011, after 30 years with the bank.

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.

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.

In tandem with the Moody's announcement, Tootell announced he would be stepping down as the bank's CEO and Rod Bulmer would take over as acting CEO until a permanent replacement is found.

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 said it has put in place a clear plan to do so at the time.

"Our banking business is already characterised by excellent levels of customer service and advocacy, as recently highlighted in reports by YouGov and uSwitch," said the bank in a statement.

"Our primary current account base in recent years has enjoyed significant growth. The actions we will now take to strengthen our balance sheet and simplify our business model around a core relationship banking offer, will create a compelling co-operative banking business which is truly distinctive within the banking sector."

Moody's downgraded the bank's deposit and senior debt ratings to Ba3, from A3, following its lowering of the bank's baseline credit assessment (BCA) to b1 from baa1.

The equivalent standalone bank financial strength rating (BFSR) is now E+ from C- previously, Moody's said in a statement.