Co-operative Bank's annual loss more than doubles to £610m in 2015 as conduct charges add up

 
William Turvill
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Branches Of Co-operative Bank To Be Cut By 15 Percent
Co-op Bank said conduct and legal risk charges during the year totalled £193.7m (Source: Getty)

The Co-operative Bank's losses more than doubled in 2015 as the company dealt with conduct charges.

The results have been released as the bank searches for its fourth chief executive since 2011.

The figures

The bank has reported pre-tax losses of £610.6m for last year, down from a loss of £264.2m in 2014.

Read more: Co-op Bank kicks off search for new boss to replace Niall Booker

Conduct and legal risk charges during the year totalled £193.7m, up from £101.2m in 2014.

Co-op Bank said it had reduced its costs during the year by £76.5m to £491.9m.

Why it's interesting

Co-op Bank nearly collapsed in 2013 with a £1.5bn hole in its capital discovered following losses from problem real estate loans.

It is now just 20 per cent owned by the Co-operative Group after it was bailed out by two US hedgefunds following the scandal.

Read more: Co Op Bank given breathing space on capital requirements

The outgoing chief executive said it has made “considerable progress” in “turning the bank around” in 2015.

The bank expects to report on more losses next year.

Co-op Bank is currently looking for a replacement for outgoing chief executive Niall Booker. He replaced Barry Tootell in the position in 2013. Tootell started in 2011, replacing Neville Richardson, who started in 2009.

In 2014, after resigning as chief executive of Co-op Group, Euan Sutherland branded the organisation “ungovernable”.

What the company said

Booker:

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.

The work done in de-risking and simplifying the Bank means the business is much stronger than a year ago and, in particular, the continued strengthening of the performance of our retail franchise is encouraging for the future. 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.

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