Co-op counting the costs of bank rescue plan

The Co-op Bank has today unveiled its rescue plan. Photo: Rui Vieira/PA Archive

Co-op has just released its plans to try to avoid the Co-op Bank becoming a casualty of the financial crisis, five years on.

Back in the summer, together with the authorities, it revealed it had a black hole of more than a billion pounds in its balance sheet, caused in part by bad loans it took on with the troubled building society, Britannia back in 2009.

The bank, which had been trumpeted as a challenger to its big high street rivals, has spent the last couple of months under new management trying to work out a way to avoid being 'resolved' by the Bank of England - taken over by the authorities.

Under the plan the Co-op Group will keep 30% of the bank and inject £462 million to keep it afloat.

The much bigger share, 70% will be held by a group of hedge funds and investors.

But the bank will also have to cut a lot of costs to give it a decent chance of surviving.

Management wants to close 15% of the branches, which will lead to many job cuts. Speculation is that at least a thousand will go, although the boss has this morning refused to give a final answer.

This plan to get more money into the business, and slim it down to give it a decent chance, must still be approved by investors in a vote.

But LT2 Group, which represents the owners of a big chunk of the bank, has already agreed to the terms - a suggestion that this is plan may be the bank's best hope yet.

Video report by ITV News correspondent Martin Geissler: