Co-op Group's share in Co-op Bank to fall in latest capital raise

09/05/2014 - 7:40

LONDON (Reuters) - Britain's Co-operative Bank said it would raise 400 million pounds ($678 million) of extra capital through the issue of new shares which will see the Co-operative Group's shareholding decline.

The bank said in March that it needed to raise the funds to cover the cost of past misconduct. The latest capital raise comes on top of last year's 1.5 billion pound recapitalisation which saw the Co-operative Group cede control of the bank to bondholders including U.S. hedge funds.

Co-op Group said on Friday that it would take part in the latest capital raise and retain a significant stake. It said its shareholding would be reduced from the current 30 percent but it expected to remain the bank's biggest single shareholder.

(Reporting by Matt Scuffham, Editing by Paul Sandle)