Co-operative Group's £2.5bn loss is worst in its history

The Co-operative Group has reported annual losses of £2.5 billion, the worst in the company's history.

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Co-op boss: 'Thousands' of jobs to go from the group

The chief executive has admitted the Co-operative's 'disastrous' £2.5bn losses for 2013 means that "thousands" of jobs will go from the organisation.

Richard Pennycook said: "I wouldn't want to pretend that there won't be job losses. We have said that there will.

"I don't want to put a specific number on [fewer people working for the Co-operative] but it will be a smaller group, some thousands of people smaller than that.

"Some of those because of our colleagues, in businesses that we are selling, will be going with those businesses to new owners."

He said that the group would remain a "very significant" employer in two years' time, adding that within four weeks the organisation's AGM would reveal the "new shape of the group", and a "clearer idea of how it is going to look".

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Co-op boss outlines cause of 'disastrous' 2013 results

The interim chief executive of the Co-operative said the group's losses arose principally from three causes.

Firstly, the continuing losses reported by the Bank as a result of the impairment of corporate loans, conduct issues and failed computer development projects.

Secondly, the write-off of our accumulated 115 year investment in the Bank following its emergency recapitalisation, in which we participated but in the process saw our shareholding fall from 100% to 30%.

And thirdly, a partial write-off of the goodwill created on the 2009 acquisition of the Somerfield food business following a strategic review of that business.

– Richard Pennycook chief executive of the Co-operative group

The final results for The Co-operative Group highlighted heavy losses that reflected:

  • Significant losses at The Co-operative Bank (“the Bank”)
  • Loss on reduction in Group’s shareholding in the Bank
  • Impairment of goodwill which arose on the Somerfield acquisition
  • Reduced sales in Food, impacted by disposal programme designed to focus business on its core convenience store chain
  • Increased central corporate costs

Co-operative Group boss: '2013 was a disastrous year'

The Co-operative Group has announced annual losses of £2.5 billion after suffering the worst crisis in its history following the near-collapse of its banking arm.

The Co-operative Group reported its worst ever losses. Credit: Nick Ansell/PA Archive/Press Association Images

Interim chief executive Richard Pennycook 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."

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