Things are looking up again for the once-troubled Co-operative Bank, as it unveiled incredible shrinking losses…
Pre-tax losses shrank to £177m in the six months to the end of June, £27.2m less than the £204.2m loss it made last year.
Operating income was £228.2m, down slightly from £236.5m last year – although operating costs shrank for £222.8m, down from £262.9m last year.
Capital reserves fell to 13.4 per cent, from 15.5 per cent in December – although it has been given a little breathing space on capital requirements by the Bank of England's Prudential Regulation Authority.
It also said it had set aside £33.5m to pay for payment protection insurance after an FCA report earlier this month set a deadline for payouts. Ooof.
Why it's interesting
But the bank is turning itself around, and last month's appointment of a new chief financial officer was a case in point: a veteran of Barclays, EY and Hiscox, John Worth is surely a safe pair of hands.
The outcome of the EU referendum may have thrown a slight spanner in the works: chief executive Niall Booker said uncertainty created by the Brexit vote is likely to lead to "lower for longer" interest rates, which "may restrict our ability to grow revenue in the short term".
He added the process of turning around the supertanker "will continue to impact our overall financial performance until the end of our plan period" – but that, with customer satisfaction at its highest level since 2013, things are beginning to look up.
What the Co-op Bank said
We have always been clear that turning the bank around would be a significant journey of at least five years and so far the overall story remains one of progress and improvement. Much has been achieved in de-risking the bank, in strengthening our resilience, in improving our IT platform, in demonstrating our values and ethics in action and in ensuring good outcomes for customers.
Despite the challenges ahead, we continue to make progress building a differentiated, resilient bank which is valued by our customers for the quality of its service and I would like to thank colleagues for their hard work and dedication in meeting our customers’ needs.
The bank continued to make progress in the first half, although the Brexit vote hasn't made things easy.