In a low interest rate environment, prospects for substantial profits growth at Co-op bank are limited.
"I've been in touch with Howard Wilkinson, the chair, and the Co-op Bank, " added the Sheffield Hallam MP.
With all the uncertainties about how the Co-op will fill the hole in Co-op Bank's capital resources, it seems unlikely that the PRA will remain quite so arms length.
That said, the downgrade is likely to make it a bit more expensive for the Co-op Bank to borrow, which doesn't help when its profitability is so squeezed (as it is).
Which would go some way to explain why they learned only recently that property loans Co-op Bank acquired in 2009 with the takeover of Britannia are pretty stinky and loss generating.
Now one of the most striking things about Co-op Bank's customers is they seem to love their bank rather more than would be true of customers of the bigger banking groups.
The Co-op Bank refused to be interviewed for Money Box, but did give a statement in which it said that its authorised overdraft is designed for customers who need a "significant short-term borrowing facility".
BBC: NEWS | Programmes | Moneybox | High charges for Co-op overdraft
With the deadline on Wednesday looming, this is regarded by the club as the quickest solution, but the Co-op bank has yet to accept the bid as it would keep the debt levels the same.
"We have a number of people who want to invest in the club but the problem is that chairman Howard Wilkinson and chief executive Nick Parker are not in control of its destiny and are relying on the Co-op bank to do the right thing, " the source added.
So it will be galling to MPs and ministers that the proposed creation of a bigger Co-op Bank - which was seen as posing a far bigger competitive threat to RBS, Barclays, HSBC and Lloyds than the alternatives and might have sparked something of a mutuals revival - is likely to be sacrificed at the altar of protecting depositors and maintaining financial stability.
The Co-op's bank will operate off Lloyds' IT systems, and Lloyds is providing the senior management of the Co-op's enlarged bank.
If the Co-op can sell you groceries, bank your money and bury you, why not get a Co-op divorce as well?
On the other hand, NBNK is confident that its IT systems skills - terribly important in any bank acquisition - are superior to the Co-op's.
That would be a huge blow to the Treasury and Bank of England, which had hoped that the Co-Op would become a powerful competitor to the big banks.
Mr Cable suggested in his speech that the future business bank could work with commercial banks such as the UK's Co-Op, and the British operation of Swedish lender Handelsbanken.
In a way, what is most interesting is that, as I understand it, Mr Tootell's departure announcement was brought forward a bit, because the Co-op felt it needed to be doing something, in the wake of the rather dour assessment of its bank's prospects by Moody's.
The non-bankers on the Co-op's top board may not have asked tough enough questions about the true state of health at their bank.
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