LONDON (Reuters) - British lender Co-Operative Bank
The Co-op Bank, part of the food-to-funerals conglomerate, said that its previously announced additional Tier 1 equity requirement of 1.5 billion pounds was unchanged despite the revised calculations on payment protection insurance (PPI) costs.
Banks have so far set aside 16 billion pounds ($25 billion) to deal with what has become the most expensive consumer scandal in British history. The policies were meant to protect borrowers in the event of sickness or unemployment but were often sold to those who would have been ineligible to claim.
The Co-Op also said it expected its 2013 common equity Tier 1 ratio to exceed minimum regulatory requirements of 7 percent, but fall below 9 percent. Further details on its recapitalisation plan would be announced shortly, it said in a statement.
Co-op Bank, which has 4.7 million customers, racked up big losses on commercial property during the financial downturn and in the throes of a major restructuring to avoid government bailout.
In June, the Co-op Group said bondholders must convert their debt to shares before it would inject 1 billion pounds of capital and retain a majority stake before the bank is floated on the stock market.
(Reporting by Sinead Cruise, editing by Sarah Young)