The Co-operative Bank has puts itself up for sale just after passing on management of its legacy mainframe banking systems to IBM.
The sale has been driven by low interest rates and the “greater-than-expected cost of fixing the legacy issues of the past”, according to the bank’s CEO, Liam Coleman.
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In a letter to customers, Coleman wrote: “We are stronger in a number of areas today than in 2013. We have worked hard to rebuild our customer proposition, differentiated by our values and ethics and strong customer service, which we know you value.”
Coleman said the bank had made “considerable progress” in fixing major legacy issues and making the bank more resilient overall.
Last weekend, he said it had moved its mainframe banking systems to IBM and described the migration as “a major milestone on our journey to turn the bank around”.
The migration is the culmination of two years’ work. The Co-op’s £275m, 10-year managed service contract with IBM involved migrating the bank’s core systems to the IT supplier, resulting in potential savings of £40m compared with current run costs.
The contract promised to improve the bank’s IT infrastructure and resilience, and allow it to make what it said would be significant progress in separating IT from the Co-operative Group.
At the time, the bank said the contract would lay the foundation for the further development of its digital offering.
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But the transition has not been easy, and Coleman apologised for the system downtime during the migration. “I thank our colleagues for all their hard work and commitment to deliver this, and our customers for their patience and understanding during the recent systems downtime,” he said.
Last year, the Co-op Bank announced it was closing about a quarter of its remaining branches, to be replaced by digital technology. At the time, the bank said it would close 57 branches under its cost-cutting plans, leaving it with 165, but aimed to maintain its service levels through IT.