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CEO admits continuing issues

Co-op Bank losses rise as legacy issues remain

Co-op BankCo-operative Bank has seen its first half losses surge from £77 million to £204.2m as it continues to grapple with legacy issues.

The troubled bank was hit by net losses on asset sales and the costs linked to legal matters and underinvestment in its systems and processes.

Niall Booker, chief executive, said efforts were being made to mend the balance sheet and make the bank’s systems more resilient.

He said the strategy was beginning to bear fruit, although the problems of recent years would continue to cast a shadow for some time.

Over the first half of 2015 we have continued to make real progress delivering our turnaround plan focusing on reducing our risk weighted assets to increase our ability to withstand economic stress, on making our IT platform more robust and reshaping the bank around our individual and small business customers,” he said.

“Our work to improve resilience and reduce costs is on course. In addition, although the core bank remains work in progress, its performance is also beginning to improve as we increase efficiency, continue to re-invest in the brand and work with customers to offer competitive products that meet their needs. 

“Of course, we have always said that addressing legacy issues will continue to dominate financial performance for some time and there is considerable work ahead towards a full recovery.

“Moving forward, we need to stay focused on meeting threshold conditions and continuing to make the bank more resilient. We must also focus on keeping our products simple; continuing to reinforce risk management and systems; strengthening our culture and maintaining our high levels of service.

“The transformation of the bank remains challenging, however, this should not diminish the progress made against our strategic plan. The actions we are taking are creating a resilient bank that can stand alone, distinguished in the marketplace by its values and ethics. This is fundamental to driving value over time for all our stakeholders – customers, colleagues, shareholders and the communities we serve.”

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