LONDON (AP) — The U.K.'s Co-operative Group says it will launch an independent investigation into what went wrong with its banking arm — after it found a 1.5 billion pound ($2.3 billion) hole in its balance sheet.

The mutual company said Thursday the investigation will examine the events that led to need for a rescue plan, which forced bondholders to exchange their debt for shares.

The bank's troubles stem from the bad commercial loans it took on taken when it merged with the Britannia building society in 2009. Moody's has downgraded its ratings on the bank twice this year — pushing them further into junk status.

The rescue, dubbed a "bail-in," came after a change in leadership and regulators demanded the bank shore up its capital base to absorb potential losses.