The Co-op Group has agreed a new £350 million lending facility with six banks including Barclays, HSBC UK, Lloyds and fellow co-operative Rabobank.

The convenience retailer owner said the agreement follows strong financial performance including a 35 per cent increase in underlying profit in its latest annual results and a return to pre-tax profit for the first time since 2020.

The company attributed these improvements to its renewed focus on member-ownership, with membership growing 22 per cent to 6.2 million during the year. This strengthened position led Standard & Poor's to upgrade Co-op's credit rating in late 2024.

The group has also successfully renewed and extended its undrawn revolving credit facility by five years. Officials stated the new banking agreement reflects Co-op's improving financial outlook, with funding now secured to cover all upcoming bond maturities.

The deal forms part of Co-op's strategy for sustainable, profitable growth, featuring improved borrowing rates tied to specific environmental and social targets. These include achieving net zero operations by 2030, with 79 per cent of suppliers committed to Science Based Targets initiative goals. Other commitments involve reducing food waste by approximately 650 tonnes annually and improving management diversity to better reflect UK population demographics.

"This funding arrangement demonstrates the renewed financial strength of our Co-op and the power of our mutual model," said Rachel Izzard, chief financial officer at Co-op. "We're proud to strengthen relationships with existing banking partners while welcoming new lenders including HSBC UK and fellow co-operative Rabobank."

Izzard added: "By embedding our social value commitments into funding strategies, we can invest in our business while remaining accountable to our members' priorities."

The group emphasised that the agreement creates financial incentives for measurable progress on sustainability goals, demonstrating how commercial success and social impact can work together. This follows Co-op's recent return to profitability after several challenging years for the mutual business.

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