Co-op Bank posts loss, but recovery still on track
The lender saw 1% growth in both customer lending and deposits,
The Co-operative Bank has posted a first quarter loss, but insisted it remains on the road to recovery from near-collapse.
The lender booked an underlying loss of £5.1 million and a pre-tax loss of £28.6 million in the first three months of the year, in line with expectations.
Total income increased by 2%, driven by strong deposit margins, which helped offset a weaker performance in mortgages.
Co-op Bank saw 1% growth in both customer lending and deposits, and saw a 5% increase in product switching.
Chief executive Andrew Bester said: “We’ve made encouraging progress in the first quarter, reaching some key milestones against a challenging UK retail banking market and uncertain economic backdrop.
“Another focus area this year is to fix the basics that will provide a platform for development in future years, including concluding the separation of our IT infrastructure from the Co-op Group, and we are making good headway.”
The lender saw a 5% increase in operating expenses driven by spending on marketing, staff and customer experience.
In February, the Co-operative Bank returned to operating profit for the first time in five years following a difficult period for the lender.
In 2017, the Co-op Bank reached a £700 million deal with hedge funds which saved the troubled lender from a potential collapse.
The rescue deal saw the bank effectively sever its historic relationship with the Co-operative Group and separate itself from the wider mutual’s pension scheme.
Mr Bester added: “Our brand heritage is a real asset at a time when consumers are increasingly seeking ethical choices and our co-operative values are at the forefront of our new multi-media advertising campaign which launched last month: ‘For People with Purpose.’
“Our values are at the heart of our bank and are important both to our loyal customers and to our future growth.”