Cooperatives have proven again that they are successful, even in times of crises. This time the story comes from the UK, where The Co-operative Banking Group has just agreed to proceed with the acquisition of 632 branches from Lloyds Banking Group. The transaction, which is expected to be finalised by November 2013, will provide The Co-operative Bank with a network of 1,000 branches across the UK, representing nearly 10% of today's UK bank network and 11 million customers.
Lloyds Banking was required by the European Commission to sell the 'Project Verde' branches because the EU felt that the bank's market share was too large. Lloyds had to sell to the authorities' preferred bidder -the Co-operative Bank- with a considerable discount on the original ask price. The cooperative bank's values and principles based business approach aimed at building a more ethical and sustainable society clearly played to their favour. "This is another step towards creating a new banking system for Britain that gives real choice to customers and supports the economy," said, George Osborne, the Chancellor of the Exchequer.
Cooperatives enjoy great level of trust in the UK. "We are already seeing a massive increase in people wanting to put their money with us," Mr Peter Marks, the CEO of the Co-operative Bank said. "We are different. We are owned by our customers, not driven by short-term profit. We are not looking over our shoulder at the share price. We have social goals, social responsibility" he said. (source: the Independent)
This is yet another example which shows that the cooperative business model is not only a viable alternative to the mainstream shareholding model. It proves its merit in the economic crisis and does not need to be bailed out by the government, says Klaus Niederländer, Director of Cooperatives Europe.
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