Banks and ethics Banks and ethics are not widely seen as being synonymous with one another, but the.

Banks and ethics

 Banks and ethics are not widely seen as being synonymous
with one another, but the Co-op bank is trying to change that perception. It
turned down £87 million in business in 2004 because of ethical and ecological
concerns. The amount of business lost to the bank because of its ethical stance
rose from £6.9 million the previous year. The Manchester-based society also
reaped rewards from its holier than thou stance as it attributed 34% of its
£132 million profits in 2004 to its ethical policies. That compares with 29% in
2003. More loan and savings account customers
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Banks and ethics

 Banks and ethics are not widely seen as being synonymous
with one another, but the Co-op bank is trying to change that perception. It
turned down £87 million in business in 2004 because of ethical and ecological
concerns. The amount of business lost to the bank because of its ethical stance
rose from £6.9 million the previous year. The Manchester-based society also
reaped rewards from its holier than thou stance as it attributed 34% of its
£132 million profits in 2004 to its ethical policies. That compares with 29% in
2003. More loan and savings account customers joined up and stayed with the
bank for ethical reasons, it said. Simon Williams, a spokesperson for the Co-op
Bank, said, ‘When we launched our ethical stance back in 1992, its initial
appeal was very much to individual customers who wanted to know what happened
to their money while it was in the bank. Now, 13 years on, 36% of personal
customers and a quarter of the bank’s corporate customers join us precisely
because we are prepared to turn away certain sorts of business.’ Refusing to
provide banking services to companies on ecological grounds cost the bank £3.8
million last year, while the cost of turning away business for animal welfare
reasons was £1.29 million. Declining to do business with companies associated
with poor human rights and labour practices lost it £847,000 and rebuffing
organisations that are involved in the production of controversial chemicals
cost it £688,000. The number of companies turned down increased because the
Co-op widened the scope of background checks made on business customers
applying for an account. For instance, in property finance it routinely
assesses the ethical record of not only the developers but also any tenants
that may underpin the development or acquisition.

 Question

 What implications might follow from this Mini Case Study
for the UK banks and financial intermediaries?

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