MANCHESTER, England, September 12 /PRNewswire/ --     The Co-operative Bank (LSE:CPBB) has created a special US$50m (GBP25m)
fund in order to support the development of small businesses in some of the
world's poorest countries.

The Bank has created an innovative line of credit in association with
several major international banks that will be used to provide microfinance,
or small loans, to the working poor around the world.

The Co-operative Bank is already part of the Global Commercial
Microfinance Consortium (GCMC) that brings together institutional investors
and development agencies in order to provide finance to poor people And is
now looking to build on that commitment with other similar organisations.

Microfinance is defined as the provision of financial services to the
working poor, usually in the form of small loans that can be as little as
US$100, which are provided through Microfinance Institutions (MFI's). MFI's
are locally based specialised, formal and semi-formal institutions e.g.
commercial banks, co-operative rural banks, credit unions and Non
Governmental Organisations (NGOs) who provide financial services to third
world micro-enterprises such as small farmers, fishermen, street vendors,
cobblers etc. Currently there are over 10,000 MFI's worldwide, providing
financial services to 100 million individuals.

Richard Wilcox, Head of Structured and Asset Finance said: "As a member
of the GCMC executive board, I've seen at first hand the valuable role
microfinance can play in allowing people to trade their way out of poverty.

"The Co-operative Bank's ethical policy clearly states what we will and
will not do with our customers' money whilst it is in the bank. Our
involvement in microfinance clearly demonstrates to our customers the
mechanics of how our ethical stance really works and shows how their money,
when invested with the bank, can make a real difference in tackling global
poverty."

"This structured approach will establish The Co-operative Bank as a
credible supporter of microfinance and reinforces our reputation as a leading
exponent of corporate responsibility."

Alongside our participation in the GCMC, the bank also recently committed
US$2mmillion to the Blue Orchard Loans for Development Fund(i) launched by
Morgan Stanley and managed by global microfinance investment manager
Blue Orchard Finance SA. The securitised fund comprises loans to 21
Microfinance Institutions in 13 countries in Latin America, Eastern Europe,
Asia and Africa and is the first microfinance transaction to receive
investment grade rating from a major ratings agency.

Notes to Editors:

- ISDN facilities are available for broadcast media interviews
on +44-(0)161-827-5793.

- In 2005, The Co-operative Bank committed US$5million (GBP2.6
million) to the US$80 million GCMC. At its launch the Consortium represented
the largest public-private microfinance partnership. The Consortium lends to
MFIs either directly or in partnership with commercial banks, subject to a
maximum loan size of US$3million. The fund has provided loans having
committed to MFIs across the globe in places such as Russia, Kosovo, Peru,
Nicaragua, Colombia, Pakistan, Mozambique, Mongolia and Azerbaijan.

- In May 2007, the Bank committed US$5m (GBP2.6m) to the US$108m 'BOLD'
fund launched by Morgan Stanley. The fund will comprise 21 loans to MFIs in
13 countries with the largest country exposure being Bosnia.

- (i)Blue Orchard Finance SA is a Geneva based fund manager, specialising
in Microfinance loans, established in 2001. It has over US$500m under
management, and over 700 clients across the globe.

- Case Study: Picture shows Felipe Baquerizo Reyes, a crab vendor from
Ecuador, who is a client of Banco Solidaro, a commercial bank providing
financial services to micro-entrepreneurs supported by GCMC. Felipe, who
previously struggled to make ends meet, used his loan to buy freezers. This
allowed him to expand his business to start exporting to the US and he now
employs 20 workers.