Britain's Co-operative Group has named former HSBC banker Niall Booker as the man to steer its banking arm back to health after concerns over its capital position emerged this month.
Booker replaces Barry Tootell, who stepped down as chief executive of the Co-operative Bank this month after its debt rating was cut to junk status by Moody's over concern about a capital shortfall that analysts suggested could be as high as 1.8 billion pounds ($2.7 billion).
The bank, part of the wider group that includes supermarkets, funeral services and pharmacies, is in talks with Britain's financial regulator to agree on a plan to address the shortfall.
The group's new chief executive Euan Sutherland is expected to update the Co-op board on the talks at a meeting on Friday.
"The board and I are confident that Niall will add tremendous value, helping us work through the complex issues that we currently face as we work to reposition our bank," Sutherland said in a statement on Monday.
The bank, one of Britain's smaller lenders with 6.5 million customers and a 1.5 percent share of the current account market, said last week that it had stopped lending to new corporate clients..
"There are no quick fixes here, but with the support of The Co-operative Group, our staff and our loyal customer base, I am confident we will be able to stabilise and develop the franchise," Booker said on Monday.
The 54-year-old, who stepped down as head of HSBC's North America business in 2011 after 30 years with the bank, has also been appointed deputy chief executive of The Co-operative Group and will start on June 10.