Co-operative Bank cuts losses to £135m but sheds another 25,000 customers

Troubled lender the Co-operative Bank has narrowed half-year losses, but continued to shed banking customers and borrowers amid uncertainty ahead of its recent rescue deal.

The group said it lost around another 25,000 current account customers since the end of last year, while it also saw £400m of instant access savings cash pulled out.

It confirmed it was partly hit by “retail customer reaction to uncertainty” surrounding the £700m deal secured in June with its hedge fund investors – a move that will spell the end of its historic relationship with the Co-operative Group.

Chief executive Liam Coleman insisted the Co-op Bank had put in a “resilient” performance in its first half, with losses trimmed to £135.2m for the six months to June 30 from £177m a year earlier.

He added: “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.”

Under the refinancing package agreed with its hedge funds, which is expected to complete in September, the wider Co-op Group’s stake in the bank will shrink from 20 per cent to around 1 per cent, with the lender also agreeing to separate itself from the wider mutual’s pension scheme.

But the bank will keep the Co-op branding and has pledged to retain “values and ethics at its heart”.

The deal will give Co-op Bank the ability to meet regulations on long-term capital requirements, avoid it being wound down and allow it to continue as a stand-alone lender.

Mr Coleman said it had been a “challenging journey” for the bank in recent months, but added that customer account losses had “moderated” in May and June.

The group saw its full-time staff workforce fall by nearly 900 to just over 3,300 in the first…

Full article from the Source…

Back to Top