The Co-operative Group confirmed that chief executive Euan Sutherland has resigned from the company, after less than one year in the role, as the embattled lender tussles with financial survival and a drugs and sex scandal involving its former chairman Paul Flowers.
In a statement, the Co-op revealed that chief financial officer Richard Pennycook will take over from Sutherland in the interim with immediate effect.
"It is with great sadness that I have resigned as Chief Executive. I have given my all to the business and had hoped to be able to lead its revival," said Sutherland, who was in line to receive £3.7m (€4.4m, $6.2m) for his first year in the job, nearly three times more than his predecessor received.
"However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.
"Saving the Co-op Bank and with it the Co-op Group from administration was a huge task, but the changes required do not stop there, with fundamental modernisation needed to safeguard the 11 future for our 90,000 colleagues and millions of members."
Trouble started in May 2013, after the Co-op Bank's head of banking Barry Tootell resigned after ratings agency Moody's suggested that the British government may have to bailout the lender.
Moody's slashed the bank's debt rating to "junk" status, due to concerns that the lender had a black hole in its balance sheet.
Sutherland soon took over as CEO that same month.
On 22 November, police arrested former chairman Paul Flowers, as part of an investigation into the supply of illegal drugs. He has since been bailed.
Ursula Lidbetter, Chair of The Co-operative Group added, "last year, Sutherland and his team saved the Co-op Bank, without recourse to the taxpayer, and in doing so rescued the Group from the biggest crisis in its 150-year history. They have worked night and day to renew the organisation and to give it a sustainable future."
"Sutherland's resignation must now act as a catalyst for the real and necessary change which the Group must go through."
How the Co-op Plans to Shirk of Scandals
In January 2013, the Co-op unveiled the first set of details surrounding its benchmark internal review.
Lord Myners, who will receive a token £1 salary for his work as chairman of the Co-op's internal governance review, will be scrutinising the ethical organisation's democratic systems and control structures within two phases.
During the first phase, the review will focus primarily on the development of recommendations for strengthening the board structure, composition, working processes and board policies, following the scandal surrounding its former chairman Paul Flowers, that has allegedly been embroiled in taking hard drugs and engaging in paid-for sex orgies.
Myners said the review board will report on findings and recommendations by April 2014.
In Phase 2 of the review, expected to be completed in late 2014, recommendations will be developed for strengthening links with members, as well as with other customers of the group and its employees, in a bid to quell any concerns over the bank's stability.