Business

Co-op Bank reports loss of £75.8m

  • 22 August 2014
  • From the section Business
Co-operative bank
The Co-operative Bank has been through some turbulent times

The troubled Co-operative Bank has reported a pre-tax loss of £75.8m for the first half of 2014, down from £845m a year ago.

It has also cut staff numbers by 13% in the first six months of the year.

The bank was rescued in 2013 after discovering a £1.5bn capital shortfall.

"Considering the scale of the challenge we faced a year ago we are encouraged by the progress made to ensure the stability of the bank," said chief executive Niall Booker.

Scandals

After the discovery of the capital black hole, a deal was reached which saw the wider Co-op Group cede majority ownership of the bank to bondholders, including a number of US hedge funds.

Last year, before the bank rescue, it was hit by a separate scandal when its former chairman Paul Flowers was arrested in connection with a drugs supply investigation.

In April the bank confirmed it made a loss of £1.3bn for 2013.

Mr Booker reiterated that the bank did not expect to achieve a full-year profit until 2016.

But he also said the bank was now ahead of schedule in the disposal of non-core assets and had "improved governance, particularly at board level".

Chris Wheeler, a banking analyst at Mediobanca, told BBC 5 live that "there are signs of progress" but there were still "problems they have to deal with," including a drop in deposits.

Mr Wheeler also said that a reduction in money set aside for bad debts "flattered" the profit figures.

The bank also lost 28,199 current accounts in the first half of 2014, but that figure represented less than 2% of accounts.

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