Co-op Bank is suffering a customer exodus after a tawdry sex and drugs scandal and revelations about its parlous finances. In a surprise statement to the stockmarket the bank admitted yesterday that there has been an increase in customers ditching their current accounts. The self-proclaimed ‘ethical’ lender acknowledged ‘recent events may have caused some brand and reputational damage’. 'He let the party down': Baroness Boothroyd with Paul Flowers in 1981 . It added that this had contributed to ‘an increase the Bank has seen in the switching out of current accounts.’ The lender could not put a figure on the number of customers that have deserted in recent weeks. However, experts pointed out that there must have been significant desertions for a stock exchange announcement to have been necessary. The statement is the first admission that many of the bank’s previously loyal customers have finally run out of patience. The bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys. Flowers has been bailed after being questioned by police. It comes on the eve of a crucial life or death vote for the 141 year old bank. Disgraced flowers . Thousands of its bondholders have to decide  whether to sanction a rescue package to plug a £1.5 billion black hole in its finances. If a large majority do not approve the deal, the bank could be wound down by the Bank of England. The first deadline in the crucial poll falls at 4.30pm today (Friday) and the final closing date to vote is early next month. John Mann, the Labour MP and member  of the influential Treasury Select Committee said: ‘It’s no surprise whatsoever that the Co-op is losing customers. ‘Many of my constituents are worried about whether their money is safe. The chancellor really needs to be out there providing reassurance.’ Hedge fund investors that want to win control of the bank have already committed themselves to the rescue package but the plan must also win the support of small bondholders. If the scheme fails bondholders stand to lose their investment but people with ordinary savings deposits of up to £85,000 are covered by the Financial Compensation Scheme. The bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys . In its statement to the City the bank said its recent troubles, competition from other banks and the introduction of seven day account switching in September have all contributed to defections by  current account customers. Rival banks have launched multi-million pound advertising campaigns, with Halifax offering £100 cash back to lure new customers. The Co-op’s financial problems mean it has been unable to compete for new customers with expensive advertising campaigns. The bank said it had not seen a similar level of departures by savers. The bank previously portrayed itself as a cut above its High Street rivals, presenting itself as an ‘ethical’ bank. This has proved a powerful lure for many customers fed up of the antics of mainstream lenders.But consumer campaigners said many who turned to the Co-op because of its claims to be ‘ethical’ have lost faith after recent revelations. The rescue package being voted on today (frid) involves the funeral homes-to-supermarkets Co-op group ceding control of the bank to a group of US hedge funds. The Co-op Bank will be floated on the stockmarket, meaning it will be owned by shareholders instead of members. The bank has desperately tried to persuade customers this will not compromise its ethics. But Laura Willoughby, chief executive of consumer campaign group Move Your Money said: ‘There is uncertainty about the future of the Co-op and its future as an ethical bank. 'Customers who went to the Co-op because of its ethical credentials are looking for other places to put their money. Many still don’t want to go to the big five banks. We are seeing strong anecdotal evidence that people are moving their money to building societies such as Nationwide.’
Bank announced more customers are ditching their current accounts .
Bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys .
Flowers has been bailed after being questioned by police .
Co-op Bank is suffering a customer exodus after a tawdry sex and drugs scandal and revelations about its parlous finances. In a surprise statement to the stockmarket the bank admitted yesterday that there has been an increase in customers ditching their current accounts. The self-proclaimed ‘ethical’ lender acknowledged ‘recent events may have caused some brand and reputational damage’. 'He let the party down': Baroness Boothroyd with Paul Flowers in 1981 . It added that this had contributed to ‘an increase the Bank has seen in the switching out of current accounts.’ The lender could not put a figure on the number of customers that have deserted in recent weeks. However, experts pointed out that there must have been significant desertions for a stock exchange announcement to have been necessary. The statement is the first admission that many of the bank’s previously loyal customers have finally run out of patience. The bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys. Flowers has been bailed after being questioned by police. It comes on the eve of a crucial life or death vote for the 141 year old bank. Disgraced flowers . Thousands of its bondholders have to decide  whether to sanction a rescue package to plug a £1.5 billion black hole in its finances. If a large majority do not approve the deal, the bank could be wound down by the Bank of England. The first deadline in the crucial poll falls at 4.30pm today (Friday) and the final closing date to vote is early next month. John Mann, the Labour MP and member  of the influential Treasury Select Committee said: ‘It’s no surprise whatsoever that the Co-op is losing customers. ‘Many of my constituents are worried about whether their money is safe. The chancellor really needs to be out there providing reassurance.’ Hedge fund investors that want to win control of the bank have already committed themselves to the rescue package but the plan must also win the support of small bondholders. If the scheme fails bondholders stand to lose their investment but people with ordinary savings deposits of up to £85,000 are covered by the Financial Compensation Scheme. The bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys . In its statement to the City the bank said its recent troubles, competition from other banks and the introduction of seven day account switching in September have all contributed to defections by  current account customers. Rival banks have launched multi-million pound advertising campaigns, with Halifax offering £100 cash back to lure new customers. The Co-op’s financial problems mean it has been unable to compete for new customers with expensive advertising campaigns. The bank said it had not seen a similar level of departures by savers. The bank previously portrayed itself as a cut above its High Street rivals, presenting itself as an ‘ethical’ bank. This has proved a powerful lure for many customers fed up of the antics of mainstream lenders.But consumer campaigners said many who turned to the Co-op because of its claims to be ‘ethical’ have lost faith after recent revelations. The rescue package being voted on today (frid) involves the funeral homes-to-supermarkets Co-op group ceding control of the bank to a group of US hedge funds. The Co-op Bank will be floated on the stockmarket, meaning it will be owned by shareholders instead of members. The bank has desperately tried to persuade customers this will not compromise its ethics. But Laura Willoughby, chief executive of consumer campaign group Move Your Money said: ‘There is uncertainty about the future of the Co-op and its future as an ethical bank. 'Customers who went to the Co-op because of its ethical credentials are looking for other places to put their money. Many still don’t want to go to the big five banks. We are seeing strong anecdotal evidence that people are moving their money to building societies such as Nationwide.’
customers ditching their current accounts. The bank is fighting to salvage its reputation after former chairman Reverend Paul Flowers allegedly organised drug-fuelled orgies with rent boys. Flowers has been bailed after being questioned by fighting to salvage its reputation after former