Moody's Investors Service has downgraded the deposit and senior debt ratings of Co-operative Bank PLC to "junk" status amid concerns about the significant deterioration in the bank's credit quality.

The company's CEO, Barry Tootell, resigned, but the bank insisted the decision was an "unfortunate coincidence."

The ratings agency says the Co-operative's problems stem from the 2009 acquisition of Britannia Building Society. Moody's says the bank underestimated the risks, particularly in a weak economic environment.

The downgrade comes only weeks after the bank pulled out of a deal with Lloyds to purchase some 630 branches.

The Co-operative says in a statement that they are disappointed by the ratings downgrade, but that the bank has a strong funding profile and high levels of liquidity.