Co-op makes fresh changes at the top The Co-operative Group has made further senior personnel changes as it attempts to stabilise its troubled bank following a credit downgrade and concerns about its capital levels. Richard Pennycook, the former finance director of supermarket chain Wm Morrison, was named the group's new finance director, succeeding Steve Humes, who stepped down recently. The mutually owned conglomerate, whose activities range from food retail to funerals, has also appointed a new non-executive chairman for its financial services arm and bank. The role will be taken by Richard Pym, a former chief executive of Alliance & Leicester and current chairman of UK Asset Resolution, the government-owned "bad bank" created from parts of Northern Rock and Bradford & Bingley. Mr Pym will chair both the Co-operative Banking Group, which includes insurance and asset management in addition to banking, and the Co-operative Bank. He succeeds Paul Flowers, who the Co-op said was "stepping down." Mr Pym will retain his UK Asset Resolution post. The Co-op needs to bolster inadequate capital levels at its bank, whose debt was downgraded to "junk" status by Moody's, the credit rating agency, last month. Analysts at Barclays estimate that the capital hole could be as big as £1.8bn. The Co-op's financial services arm has acknowledged its need to strengthen its capital position "in light of the broader economic downturn and the pending introduction of enhanced regulatory requirements." It has already appointed Niall Booker, an HSBC veteran, to lead the stabilisation effort as the new chief executive of the Co-operative Bank. It has stopped lending to new corporate customers and is also raising money to plug the gap through disposals, including the sale of its life assurance and asset management businesses to Royal London, a mutually owned rival. Members of Royal London voted to authorise the £219m deal earlier this week. The Co-op is also looking to sell its general insurance arm. As part of the remedial action, the bank's junior bondholders may be forced to take losses on their investments. Mr Pym said in a statement on Wednesday: "We are clearly focused on actions to strengthen the bank's balance sheet and resolving the current underlying issues." The appointment of the 49-year-old Mr Pennycook has had a knock-on effect on Thomas Cook, the tour operator, where he had been a non-executive director. His recruitment by the Co-op has obliged him to resign this position with immediate effect, Thomas Cook said on Wednesday. Mr Pennycook's previous employers include motoring group RAC, the cidermaker HP Bulmer and the motorway services group Welcome Break.