The Co-op Bank's financial problems came to light during its attempt to buy more than 600 bank branches from Lloyds Banking Group. A deal was initially agreed in 2012, but fell through earlier this year.

In August, the Co-operative Bank reported a loss of £709m, with nearly £500m in write-downs stemming from bad loans that it inherited when it bought with the Britannia Building Society in 2009.

Co-op Group to lose overall control of Co-op Bank

So, with it now undoubtedly going to start having the same flexible views on ethical behaviour as all the other banks, anyone know of an alternative that isn't run by a bunch of schiesterous bastards?

Building societies.

I know a few people who use the Coop bank because of their ethical standings - I am wondering what their position will be now this deal has been announced.

Probably the same as me - investigating a fallback position come the (fairly) inevitable.

What I also heard was that they also had £100 million in PPI payouts so clearly followed the rest of the industry in that scam.

Not to the same degree. Barclay's liability in this respect for example is several billion.

looks like the co-op have been grabbed by the short and curlies with 2 hedge funds after their blood
doesn’t bode well for the co-op, not what the founders had in mind ...

http://www.independent.co.uk/news/busin ... 97589.html

Let us know what you find - I have family who bank with them because of their ethics.

We’re here to bring more competition to the UK banking market, and ultimately better banking for all. The way we’ll do that is by serving only individuals and local business customers. That’s why we won’t be offering things like investment banking, or overseas investment, or big corporate finance.
Instead, our 8000 staff will focus simply on looking after £22 billion on behalf of our 4.5million customers. Because the more we can help our customers, and the communities they are part of, to thrive, the more successful TSB will be. We call this kind of balanced, straightforward banking "local banking".
It’s the kind of banking that we believe is the best way to help the households and local businesses that make up the communities of which we are all a part.

The preference for mutuals should not be based on the guarantee of a better deal but a more fundamental desire for profit to be distributed among those who help generate it. A country in which more organisations are run for the benefit of their members and customers rather than shareholders would be a very real place where success is more equitable, not a utopia where failure is impossible.
...
More of us could and should change where we keep our money. At a time of year when resolutions are made that are aimed more at self-improvement than social benefit, vowing to move our money is a more realistic and worthwhile commitment. Long after fitness regimes have faltered and unwanted gifts have gone to Oxfam, that new debit card will still be doing its good work.