Co-op Bank no profit for two years
The Co-operative Bank has reported further losses and admitted that it will not make a profit for another two years.
Although the bank’s figures are slightly better than predicted, it still made pre-tax losses for the first six months of the year of £204.2million, compared with losses of £77million for the same period a year ago.
Its half-year results were impacted by losses of £38.2million on sales of assets to lower debt levels and costs of its turnaround.
The bank, which has its headquarters in Manchester, had to be rescued in 2013 following the discovery that £1.5billion was missing from its accounts.
That was linked to losses on commercial property loans following the 2009 merger with the Britannia building society.
The bank contributed £2.1billion losses to the overall loss by the Co-operative Group of £2.3billion - the largest in the organisation’s 150 year history.
The bank is now 80% owned by hedge funds, with the remainder held by the Co-op Group.
Co-op Bank chief executive Niall Booker said it was unlikely to embark upon a stock market listing until it was closer to making profits.
He said: “We won’t be profitable in 2015 and we won’t be profitable in 2016 either.”
But he said that the bank’s recovery remains on course and that it is now better able to withstand stresses within the economy but warned that its balance sheet needed to be stronger before any possible stock market listing could take place.
In the first half of 2015, the bank set aside £49m to cover misconduct and legal charges, lost £38.2m on sales of assets needed to reduce the bank’s overall levels of debt, and spent an extra £33.1m on improving “systems and processes”.
A report by Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) concluded there were serious failings in the way the lender was run from July 2009 to December 2013, yet spared the bank a fine as it needed all the money it has to strengthen its balance sheet.
At the end of last year, it failed a Bank of England stress test, designed to test banks’ ability to withstand another financial crisis.
This was posted in Bdaily's Members' News section by Simon Malia .