Co-Op Group is to restructure its banking division (Reuters)

The Co-operative Group's chairman Len Wardle is to step down in May. The anouncement came just hours after the troubled company's former chief executive criticised the organisation.

Wardle's departure is the latest shock announcement from the Co-op Group as the mutually owned company reluctantly restructures its banking division, leaving the organisation with a 30% stake - a move that risks alienating the lender's 4.7 million customers.

Wardle said he informed the company's board in August about his decision to quit and plans to communicate his move at the organisation's forthcoming Members' Half Year Meeting in November.

"The Co-op is at its best when it is reforming and I want this change to continue," Wardle stressed.

"I am immensely proud to have led the group and to have chaired The Co-op over the last six years."

The shock announcement comes just hours after Peter Marks, former Co-op Group chief executive, told politicians that the company's loss of overall control of Co-op Bank was "tragic".

He also said to the Treasury Committee, who were investigating the collapse of the Co-op Bank's bid for 632 Lloyds branches, that the company's governance structure needs to be reformed.

"There are areas of governance within the Co-op that absolutely need to change," said Marks.

The twists and turns of the ongoing Co-op saga come days after the floundering lender announced that is to boost its mis-sold payment protection insurance compensation pot by £100m ($162m, €117m) following revised expectations on redress pay-outs.

According to a statement by the Co-op Bank, the extra compensation provisions will not affect the amount it needs to boost its balance sheet by, after regulators found a £1.5bn capital black hole in its finances.