The Co-operative Bank has reported a pre-tax loss of £75.8 million from January to the end of June this year, in the first report the lender has produced since it revealed in April that there was a loss of £1.3 billion in 2013.
The bank, which is still very much in a state of recovery following its near collapse, has said that it is encouraged by the progress made so far in 2014. It is a vast improvement on the £845 million loss reported for the same period last year.
£39 million was set aside to cover misconduct charges, the majority of which were in relation to technical breaches of the Consumer Credit Act – a relatively small figure in comparison to last year's charges of £167 million.
Chief executive Niall Booker commented: "We have gone a long way to ensure the sustainability of the bank and the bank is much stronger today by almost any measure than it was a year ago."
However, he added that although the bank has gained 9,700 new customers during the recent six-month period, it has lost 38,000 current account customers in that same time. "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," he said.
The near collapse and the recovery
The Co-op Bank's poor state came to light when its balance sheet confirmed a black hole of £1.5 billion, causing a proposed takeover of more than 600 Lloyds branches to fall through.
The bank was then taken over by senior creditors, leaving the Co-op Group with a 20% stake. This led to the departure of senior figures such as the former chairman Paul Flowers, who was in the news recently for having become entangled in a drugs scandal.
The Co-op Group made a total loss of £2.5 million last year, and Booker noted that the bank does not expect to make a full-year profit until 2016.
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