The Co-operative Bank said it has made progress since its near-collapse last year, despite making a loss of £75.8m in the first six months of 2014.
The six-month loss is an improvement on the loss of £844.6m reported the same time a year ago. It's not unexpected either – the Co-op Bank had warned back in April that it expected to remain in the red in 2014 or 2015 after reporting a loss of £1.3bn for 2013.
‘Considering the scale of the challenge we faced a year ago we are encouraged by the progress made to ensure the stability of the bank,’ chief executive Niall Booker said.
The bank said its number of permanent employees had been slashed by 13% in the first half of 2014 and it had closed 46 branches. Its capital position has also been strengthened, after raising an extra £400m to compensate customers who were mis-sold consumer products.
The Co-op Bank was saved from near-collapse in 2013 after discovering a £1.5bn black hole in its balance sheet. The discovery led to the collapse of its bid to buy 632 branches from Lloyds Bank. The bank was already struggling with its image after the very public disgrace of former chairman Paul Flowers, a Methodist minister who was arrested over drugs allegations.
The shockwaves have even reached as far as the Treasury, with George Osborne denying that ministers exerted undue political pressure over the deal between the Co-op Bank and Lloyds.
The Co-op’s woes have also taken their toll on customer relations. There was a net loss of 28,199 current accounts in the first half of 2014. Chairman Richard Pym blamed ‘negative publicity and significant competitor activity,’ although the bank said the loss accounted for less than 2% of total customers and that the ‘overall customer base remains loyal’.