UK-based Co-operative Group has scrapped its previous announced sale of General Insurance business, as the firm does not require to pump nearly £1bn fund to recapitalize the bank.
On 21 March 2013, the bank said that it would dispose of general insurance operations to recapitalize Co-operative Bank, which was threatening its stability.
However, a new plan was devised on 4 November 2013 with some investors. The bank now does not have to contribute the required capital to its struggling bank as planned initially, subsequently leading to review and termination of the general insurance business sale.
The group noted that the general insurance business has significant growth potential.
In order to fulfill the bank recapitalisation plan, the group will complete disposal of the life and savings business, as planned including other measures.
Co-operative Group group chief executive Euan Sutherland said that the company believes it is in the best interests of its members, customers and colleagues, that it retains this strong business and develop it further.
"We received a significant amount of interest in the General Insurance business, which reflects its potential," Sutherland added.
Image: Manchester head office of the UK’s Co-operative Bank. Photo courtesy of Kaihsu Tai.