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Co-op Bank slashes losses to £76m

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

The bank has set aside an additional £5m for payment protection insurance redress, and an additional net value of £4.6m for mortgage-related conduct risk.

Its total conduct and legal risk charge for the period is £38.6m, down from £163m in the first half of 2013. The bank says its review of products and practices is ongoing, but no new categories of conduct or legal risk have been provided for in the first half of 2014.

It says the additional PPI provision reflects “the latest trends and expectations of complaint volumes, uphold rates, payout data and costs”.

The mortgage redress relates to documentation and the processing of first payments on certain mortgages.

Co-op Bank chief executive Niall Booker says: “In my first statement as chief executive a year ago I talked about the deep rooted issues facing the bank. As our results show today, those issues will continue to impact performance for some time but a year on we have taken significant steps forward.”

He says the main reason for the reduction in loss is a significant fall in the level of credit impairments, from a charge of £496m in the first half of 2013 to £87m in the first half of 2014.

In April the Co-op Bank announced it made a loss of £1.3bn for 2013.

Booker says the bank does not expect to make a full-year profit until 2016. 

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