Former Co-op Bank boss Paul Flowers faces fraud charge

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Paul Flowers, a former chair of the Co-operative Bank, faces a charge of fraud by abuse of power, one of the few examples of a criminal charge against a senior banker in the UK. 

Flowers, 73, will appear before Manchester Magistrates’ Court on August 30. A spokesman for the Crown Prosecution Service confirmed the charge on Friday. Flowers faces one count of fraud between June 2016 and October 2017. The CPS said no further detail was available at this time. 

Flowers, a former Methodist minister and Labour councillor, departed the Co-op in the summer of 2013. He could not immediately be reached for comment.

Co-op declined to comment on the fraud charge.

Criminal charges against UK banks’ senior leadership teams are rare. Barclays’ former chief executive, John Varley, was charged with fraud over his role in the bank’s emergency cash-call during the financial crisis but he was acquitted in 2019.

The Co-op’s acquisition of Britannia Building Society in 2009 eventually led to its original owner, the Co-op Group, agreeing a £700mn rescue deal with hedge funds in 2017, leaving it with just 1 per cent of shares. While bad loans caused a £1.5bn black hole that led to its near-collapse in 2013, the bank is now fully owned by private equity groups.

The Co-op, which has survived to become one of the UK’s mid-sized high-street banks, made an offer to acquire rival TSB in October 2021 but TSB’s Spanish owner, Sabadell, rejected it.

Last November, chief executive Nick Slape told the Financial Times that the windfall from rising interest rates had put the bank in the position to pursue acquisitions.