Co-op narrows losses but loses customers
Co-operative Bank narrowed its losses to £135.2million from £177m for the first six months.
However, another 25,000 customers (2% of total) left the bank which in June announced plans to raise £700m to meet its capital regulatory requirements after failing to find a buyer.
Lower operating income and increased exceptional items incurred during the first six months of 2017 were more than offset by reduced operating costs and project spend, conduct charges and fair value unwind related to the merger with the Britannia Building Society.
Conduct charges were £4.7m (H1 2016: £21.1m) relating primarily to payment protection insurance (£9.2m), partially offset by releases from other conduct provisions.
Chief executive Liam Council today said: “The capital raising proposal we announced in June is progressing to plan and is currently on track to conclude by September.
“This will secure the future of The Co-operative Bank as a viable stand-alone entity with greater capital strength enabling a new phase in its turnaround.
“Against this backdrop, business performance in the first half of 2017 has been resilient. Customer satisfaction for the service we provide has increased and we have continued to reduce our cost base.
“Customer relationships are hugely important to us and the vast majority of customers have remained very loyal as we have progressed the sale and capital raise process and I am extremely grateful for their ongoing support.
“Of course there is more hard work ahead, and like other banks, we recognise there are risks to the UK economy, but this is a great bank and we are positive about the future.
“We have a competitive product set; strong customer service and a distinct ethical position and brand and although it is early days we look ahead with a robust mortgage pipeline and a renewed current account offer.
“As we celebrate 25 years of our customer-led ethical policy, we believe we have an important role to play in creating a more competitive banking market.”
Chairman Dennis Holt added: “The expected conclusion of the Restructuring and Recapitalisation will help secure the continuation of the Bank as a stand-alone entity.
“Our investors, many of whom have been with us since 2013, share our belief that the value of the Bank is embedded in the strong relationship our customers have with us, which is centred on our distinctive values and ethics, and the Restructuring and Recapitalisation will enable the Bank to enter a new phase in its turnaround focused on sustainable profitability.
“Many of the transformation and remediation projects are now largely complete, including remediating legacy conduct risk issues.”