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Euan, these results were obviously disappointing for the bank and, indeed, for The Co-operative
Group as a whole. Were we expecting the results to be this disappointing?
Well, you're right, these are disappointing results as we report our first half. We were
expecting this to be a loss making period because, on the 17th June, we reported the
very significant bank recapitalisation plan. It's still very disappointing, it still
reflects the hard work that we have to execute in the bank recapitalisation, and it's a
recognition of the impairments and losses and write offs, that we had to make, we had
to face into, in correcting the actions in the bank, and providing a solid and stable
future for The Co-operative Bank.
As you say, we announced that plan in the middle of June, so these figures don't change
the plan, the plan stays the same?
The plan remains exactly the same, you're absolutely right. It takes a number of months
to work through the very detailed work to get a prospectus together, and to get the
bank ready for public flotation on the London Stock Exchange, as we conclude our bond to
equity exchange, and the recapitalisation of the bank.
Can you just tell us, how will all of what's happened change our offer to our bank customers?
Well, the offer at the moment remains largely the same. However, what we're doing is presenting
a vision for the core retail bank that will remain after we've recapitalised the bank
towards the end of this year. Now, that bank is going to be a community based, retail focused
bank, so very much focused on individual borrowers and depositers, and very much on small businesses
too, really the heart of the local community. And, there is a very good opportunity for
The Co-operative Bank to fill that space in British banking.
Are we ever going to get to the bottom of what actually went wrong with the bank, how
did we get to this point?
Well, it's my commitment that we do get to that, and we've appointed Sir Christopher
Kelly to come in and give us an independent view of actually what happened. I get asked
this question almost every day, from colleagues, from members, from customers, from the media.
And, it is my commitment, and the commitment of the board, and the executive team, that
we understand from the mistakes that were made and, clearly, there were mistakes made.
We wouldn't be in this terrible situation unless some mistakes had been made and, we
understand from that, we build on that, and we ensure that those mistakes never happen
again.
Just turning to our other big business, our food stores, we've see a slight dip in profits
there, why isn't our food business performing better?
Steve Murrells and the food team have been working very *** identifying, and setting,
a new strategy for our food business. That took most of the end of 2012, and we've
been in set up phase in the start of 2013, making the right investments upon which to
build a very strong food business. Now, that has resulted in a point in time, for those
profits to dip slightly. In a very small amount, but they have dipped slightly. We're confident
about half two, half two represents a big refit programme across the business, some
fantastic new product innovations coming through, some amazing brand and packaging developments
coming into the stores, and a re-engagement plan with our colleagues across the whole
food business. So, the strategy's right, it's a point in time right now, and Steve
and the team have really got a grip of that business, and I feel very confident about
the prospects for food in the future.
You've said that you, and the Group executive, and the Group board, are now going to undertake
a full review of our long term strategy, what for you are the biggest challenges that we
face in the long term?
Well, I think we do have our share of challenges within the Group and, I think, the first thing
to do is to recognise that, to face into it, to admit it, and to get it widely understood
across the Group. The balance to that is that we have a very positive future. It's definitely
worth fighting for and, having a very strong Co-operative Group and Co-operative force
in the UK, is something that pretty much everybody wants. If you look at the challenges though,
I guess I would pick out two challenges. One is the level of debt. The second point is
around clarity of vision, and purpose, and relevance for the Group for today, and for
the next five, ten, fifteen, twenty years. And, both of those subjects are central to
me, central to the Group exec and, I hope, central to the leadership, and every single
colleague in the business. One of the things I've seen working very well before, is when
we really all understand the challenges, and we all pull together to deliver on them. Then,
I think, we will have a very strong future, and a very quick turnaround on this plan.
Finally, what would your message be to our customers?
Again, our customers, my biggest message to the customers, would be a big thank you. They
have continued to shop in their millions in our food stores, they've continued to have
their bank deposits with our bank, they have banked more with us this year than they did
last year, they have taken out more mortgages with us than they did last year, and they
have shown considerable support for The Co-operative Group through this period which has been very,
very difficult. So, a massive thank you to our customers. And, again, a real focus on
'stick with us', this is a fantastic business, it has great ethical heritage, and it's
got a very bright future.
Euan Sutherland, thank you very much indeed.