Co-operative Bank losses narrow but warns on Brexit impact

The bank said its half-year loss before tax narrowed to £177m from £204.2m the year before, thanks in part to a number of one-off gains including the sale of its stake in Visa Europe.

However, the Co-op said that fixing the legacy issues of the past continues to impact on the overall financial performance of the business.

In addition, the bank said that while it remains focused on executing its updated plan for the long-term benefit of all stakeholders, this has become more difficult given the uncertain macroeconomic environment following the EU referendum result, which is challenging for all banks.

It said economic uncertainty in the aftermath of the UK’s vote to leave the European Union could lead to the contraction of the UK mortgage market, which would hit core bank loan book growth.

It could also lead to lower-for-longer rates, which could restrict the Co-op’s ability to grow revenue in the short term.

Chief executive Niall Booker said: “The progress made during the first six months of the year has delivered a small core bank operating profit for the second successive half year period with mortgage originations remaining strong, an improved current account proposition, customer satisfaction scores at their highest level since 2013 and widening jaws between income and costs. In addition, with further investment in our digital channels to modernise the business around how customers want to bank today and significant progress on our major transformation and remediation programmes, much has been done.

“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 go od outcomes for customers.”