The Co-operative Bank has posted a loss of £1.3bn for 2013 and revealed a £411m redress bill, including
£114m for a raft of mortgage lending failings.
The Co-op Bank announced last month it planned to raise an additional £400m after discovering “a range of issues” following a past business review.
Its annual results, published last week, reveal the catalogue of errors which have led to total redress provisions for the year of £411m.
Some £114m of redress relates to failings in the administration of the Co-op’s mortgage business.
This includes £29m relating to the processing of initial mortgage payments; £31m relating to mortgage fees; £22m on secured arrears; £19m in arrears charges and £13m relating to mortgage documentation.
The rest of the Co-op Bank’s redress provision relates to £103m for missold payment protection insurance, £33m for missold interest rate swaps, and £109m for breaching consumer credit rules on when customers are liabile to pay interest.
The amount it has set aside also includes £26.1m over “alleged failings” in referring customers to third parties to buy card protection and identity theft cover, £15m for “conduct issues incurred but not reported”, and £10.9m for other, unspecified conduct failings.
The results come in the same week former City minister Lord Myners quit The Co-op Group board after his reforms were rejected by Co-op members.
ADVISER VIEW Alan Lakey
The Co-op Bank cannot carry on like this. It seems likely the Treasury or large bank will need to step in at some stage, which is a shame because at one time the bank had such a wonderful history.”
Alan Lakey is partner at Highclere Financial Services