The Co-Operative Bank Plc will start settlement talks with U.K. finance regulators in July, following investigations of the bank after a capital shortfall and drugs conviction raised serious questions last year.
The Financial Conduct Authority and Prudential Regulation Authority, who have been investigating the bank since January 2014, are starting enforcement proceedings in relation to “certain decisions, events and processes over the period from mid-2008 to end 2013,” the bank said in a statement Tuesday.
The Co-Op has battled with a number of issues in recent years including problem loans from the purchase of Britannia Building Society in 2009, and a 1.5 billion-pound ($2.4 billion) capital shortfall that led to a call on bondholders to help plug the gap. The issues came to a head when Paul Flowers, the former chairman of Co-Operative Bank Plc, was caught buying drugs in November 2013.
The bank said the outcome of the settlement discussions is “currently uncertain both in the details of any findings and any potential financial penalty.”