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Co-operative Bank's annual losses more than double Co-operative Bank's annual losses more than double
(35 minutes later)
Co-operative Bank's annual pre-tax losses have more than doubled to £610m, up from £264m in 2014.Co-operative Bank's annual pre-tax losses have more than doubled to £610m, up from £264m in 2014.
Conduct and legal risk charges increased to £193m due to higher provisions against the mis-selling of payment protection insurance. Conduct and legal risk charges increased to £193m, because of higher provisions for the mis-selling of payment protection insurance.
The bank almost collapsed in 2013, after bad property loans contributed to a £1.5bn hole in its finances.The bank almost collapsed in 2013, after bad property loans contributed to a £1.5bn hole in its finances.
Since then the bank has taken action to shore-up its finances and says it is much "stronger" than a year ago. Since then, it has taken action to shore up its finances and says it is much "stronger" than a year ago.
Niall Booker, chief executive officer, said: "In 2015 we have been successful in improving capital resilience, reducing costs and strengthening the performance of the Core Bank and the expected widening of our financial loss compared with 2014, due to legacy issues we have known about and highlighted for some time, should not distract from the considerable progress made in turning the Bank around." It said it had improved its balance sheet and reduced its operating costs through branch closures.
Road to recovery
The Co-op Bank was the only lender in 2014 to fail the Bank of England's key test of capital strength, which assesses the ability of major UK lenders to withstand another financial crisis.
Chairman Dennis Holt said the statutory loss and low-interest-rate environment meant the bank would take a year longer than expected to reach the levels of capital strength required by regulators.
He said the bank had disposed of more than half of its higher-risk mortgages in its Optimum portfolio, which was done to protect capital reserves.
Niall Booker, chief executive officer, said: "Whilst the Bank as a whole will report a loss before tax in 2016 and 2017, we expect a return to operating profitability in the core bank before the end of 2017."
Its core bank operation saw operating losses of £15m in 2015, down from £79m the previous year.
Mr Booker's contract runs until the end of 2016, but the lender has not yet announced a replacement, despite reports that approaches have been made to other senior bankers.