Co-op Bank Reports Six-Month Loss Of £204m

Although the bank has embarked on an ambitious project to “de-risk” itself, it was still the only bank to fail a stress test by the financial regulator last year and continues to face challenges stemming from its previous difficulties.

Part of the increased, first-half loss was due to the bank raising the amount it is spending on putting things right to £101 million, along with losses on the sale of unwanted assets.

Niall Booker, the bank’s chief executive, said the plan to rebuild the Co-op Bank was on course and that current account closures had stabilised.

Mr Booker said the group’s half-year results were “slightly better” than it expected, adding that legacy issues should not detract from the progress the group is making.

In a statement, they said that these losses are thanks to “the issues that came to light during 2013” which “continue to dominate the financial performance of the business”.

“Moving forward, we need to stay focused on meeting threshold conditions and continuing to make the bank more resilient”.

It was rescued by investors, including US hedge funds, after a £1.5bn black hole was discovered in its accounts.

He added that the bank needs to continue to make products simple, reinforce risk management and systems, strengthening culture and maintain high levels of service.

“The transformation of the bank remains challenging, however, this should not diminish the progress made against our strategic plan”.

He said that the recent findings of the PRA and FCA were a “reminder for all our stakeholders of the scale of the challenges we face, but how far we’ve come since June 2013”. It was bailed out by bondholders in 2013.

Earlier this month, the bank escaped a £120m fine from the Prudential Regulation Authority for “serious and wide-ranging failings” in its control and risk management framework, as a financial penalty was deemed not to advance the safety and soundness of the firm. It’s now dealing with hefty legal costs.

One of the most critical areas for the Co-op Bank to improve is its capital requirements – an amount of cash that a bank is required to hold, in order to create a buffer zone to help it in a time of huge market turmoil and a possible financial crisis.