Co-op could shut bank over £1.8bn black hole However, depending on the eventual size of the capital hole, the mutual could be forced to consider the sell-off of more businesses as it attempts to raise new money. The review of the bank follows a six-notch downgrade earlier this month by Moody's, which cut the divsion's credit rating to junk status. Moody's warned, in particular, of the scale of potential losses faced by the Co-op Bank, largely as a result of its disastrous 2009 acquisition of the Britannia Building Society. Impairment losses at Co-op Bank last year reached nearly £470m, more than treble the figure in 2011, as the mutual took a more pessimistic view on the lending books it acquired with the Britannia acquisition. The writedowns resulted in the Co-op Bank making a loss in 2012 of £634m, compared with a profit the previous year of £54.2m. The Prudential Regulation Authority is currently studying capital raising measures with the lender, though sources close to the bank regulator denied there were currently any discussions under way to split the business into a "good bank" and a "bad bank." Regulators had already been closely inspecting the Co-op Bank's finances after it launched a bid for 632 branches being sold by Lloyds Banking Group. It is understood that the regulator only became fully aware of the lender's problems after staff at Lloyds conducting due diligence ahead of the sale began to raise concerns about the state of its finances. Along with rebuilding the bank's capital strength, the Co-op is also under pressure to find a new management team for the business. Barry Tootell resigned as chief executive of the Co-op Bank following its downgrade by Moody's. In addition, the business has no permanent finance director or head of risk. The Co-op is looking to claw back bonuses from departed senior managers in the wake of the losses. Among the main targets of any clawbacks is understood to be Neville Richardson, the former chief executive of the Britannia, who led the Co-op's combined banking business until he left the mutual in 2011.