LONDON - Britain's ethically-minded Co-Operative Bank said yesterday it would not do business with biotech companies involved in genetic modification (GM) or cloning.

The bank, which reported record annual profits last month as it reaps the rewards of ethical investment, said the decision reflected a change in its stance following consultation with its customers. "Our stance in genetic modification, which received widespread support amongst those polled, reflects our customers' genuine concerns," said Simon Williams, director of corporate affairs.

"They are not fundamentally opposed to it but they worry about the potential impacts that could arise from the application of GM technology."

The bank, whose roots date back to 1872, is part of the Co-Operative Group, one of Britain's oldest mutual societies whose services range from grocery shopping to funerals.

The society was set up in northern England, originally to enable low income households to buy good food at reasonable prices and to boost the purchasing power of the working class.

Co-Op Bank has aimed to differentiate itself from its publicly-listed rivals through its ethical policy - a growth area in the UK - though it remains a relatively small player. It has three million customer accounts, contrasting with Barclays Plc for example which has over 10 million UK current accounts.

Co-Op Bank's ethical policy, adopted 10 years ago, states it will not invest in or provide financial services to organisations dealing in areas like the arms trade or blood sports, or organisations whose policies it feels may harm the environment.

It will refuse services to biotech companies involved in uncontrolled release of genetically modified organisms into the environment, terminator technologies - these prevent crops from reproducing seeds - or cloning.

Those it will do business with: firms that take a responsible approach to labour rights, those involved in recycling and promoting renewable energy, as well as charities.

A spokesman for the bank said it would not have to give up any of its existing biotech customers as a result of its new approach to the sector.

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