Co-op Group chairman becomes latest victim of crisis at mutual’s banking arm

Co-op Group chairman becomes latest victim of crisis at mutual’s banking arm

The chairman’s job has historically gone to one of the 20 members of its group board, all elected from regional boards.

Mr Marks, meanwhile, used a much-awaited appearance before the Treasury Select Committee to attempt to defend his role in the current crisis, claiming that he was only “partly responsible” for the bank’s current problems.

“My official role at the bank was that of non executive director” Mr Marks told the committee, denying suggestions he had acted as a shadow executive director and claiming he was responsible for all of the group’s nine businesses bar the bank.

However, facing intense questioning during which he was branded as ‘out of his depth,’ ‘gung-ho,’ and suffering from ‘selective amnesia,’ Mr Marks did admit that he had been the “driving forrce” behind the attempt to buy 631 branches from Lloyds.

But Mr Marks, who retired in May, said the Lloyds deal, which collapsed a month earlier in April, would only have strengthened the group.

He insisted that the Co-op was not “Peter Marks PLC” and that all decisions relating to the bank were taken unanimously by the group board and the separate bank board.

“This is not a dictatorship,” he said.

Instead he laid the blame for the bank’s current capital predicaments on its 2009 merger with Britannia Building Society – impairments on commercial loans from which have triggered the shortfall – and regulators shifting the goal posts on capital requirements.

Over and over, Mr Marks branded the bank’s problems a “tragedy” and claimed “the bank is a victim of the financial crisis.”

The former chief executive, who joined the Co-op movement as a 17-year-old shelf stacker in 1967, also blamed the archaic governance structure of the Co-op Group, and claimed the member-elected board is incapable of making a strategtic decision.

Asked by committee chairman Andrew Tyrie if he was describing a “severe structural failure at the heart of the Co-operative,” Mr Marks replied: “You could interpet it that way.”

He also admitted that he dismissed concerns raised by former bank chief executive Neville Richardson that the bank was becoming over-streched in terms of projects, and said he didn’t think of informing regulators that that disagreement was the primary reason behind Mr Richardson’s resignation in the summer of 2011.

Mr Marks added that the bank’s problems could be good for the other group businesses, as it would mean management and capital would be less stretched.

However fresh data from Kantar Worldpanel showed that the Co-op’s retail business is suffering.

In the 12 weeks to October 14, Co-op sales fell by 1.2pc, by far the worst performance among Britain’s major grocery retailers, with its market share down to 6.4pc from 6.7pc a year ago.

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