Co-operative Bank narrows losses

The Co-operative Bank suffered a customer exodus amid a “hurricane of negative publicity” as 38,000 current account holders left in the first half of 2014 following its near-collapse last year.

Results for the period showed the lender narrowed losses to £75.8 million compared to £844.6 million for the same period in 2013, but the toxic legacy of its recent woes saw many customers depart.

Chief executive Niall Booker said it was in a much stronger position today after it cut costs by shedding branches and slashing nearly 900 jobs, and beefed up its balance sheet, most recently with a £400 million capital-raising in May.

However it lost a net 28,199 current account customers during the first six months of this year, with the departure of around 38,000 partly made up for by 9,700 new customers. The net loss amounted to 2 per cent of the total.

Mr Booker said: “Considering the amount of time that we spent receiving negative publicity during the first and second quarters, I think the reduction is not significant and probably less than we would have expected.

“The loss of any customer is a mortal wound to somebody like me who has been in the industry for a long period of time. I don’t think it is a bad outcome, but I certainly don’t want to appear complacent about it.”

It came during a period when the lender reported a full-year loss of £1.3 billion, and the wider Co-operative Group announced it had plunged £2.5 billion into the red for 2013.

Meanwhile a scathing report by former Treasury mandarin Sir Christopher Kelly blamed the bank's near-collapse – after a £1.5 billion hole was discovered in its balance sheet – on a "sorry story" of multiple management failures.

The disastrous period saw it having to be rescued in a deal which saw the wider Co-op group’s stake in the lender shrink from 100 per cent to 20 per cent as it ceded ownership to bondholders. – (PA)