People who have savings accounts* or a mortgage with the Co-op don’t need to worry about the Co-op’s current problems. But holders of preference shares, PIBS or bonds may well be badly affected, with figures of 30% losses being talked about.
The Co-op has said there are less than 5,000 ‘retail investors’ affected. It appears that their estimate is taken from the number of people on the share registers, but this ignores the fact that most holders will be using their broker as a nominee account and so will not appear on the register as individual holders. Mark Taber, who ran a succesful action group for Bristol and West PIBS holders who were affected by Bank of Ireland problems, thinks that there are more likely to be over 15,000 Co-op retail investors affected.
Many of these investors will be elderly as PIBS were seen as a comparatively safe long term holding for pensioners. If you don’t have any it is possible that your parents may, and it is possible that they don’t realise they will be affected as they bought Britannia PIBS and the news headlines are about the Co-op.
Mark Taber is gathering a list of people holding these instruments. At this stage it seems that the Co-op has not decided exactly how retail holders will be treated and an informed collective voice could be useful in influencing them. To add your name to the list, complete this form .
The Motley Fool’s Banking Sector discussion board has a lot of comments about the Co-op. Mark posts there as OldBoyReturns. This thread covers the possibility of setting up an Action Group and getting together a list of holders.
EDIT – after pressure from bond holders, small and large, the Co-op has completely restructured their offer. The new offer is described in full on the Co-op website here.
* assuming you have less than the FSCS £85,000 compensation limit