Co-op’s £500m loss as talks for a sell-off begin

THE Co-op Bank lost nearly £500m as doubts continue to swirl about its future.

Bosses put the beleaguered lender up for sale last month amid frenzied speculation it was in dire need of extra cash.

They will seek to raise an extra £750m from investors if a buyer cannot be found.

If both plans fail, it will spark fears the bank could be wound up by regulators in a process called resolution.

Chairman Dennis Holt yesterday insisted the bank was in no danger of running out of money, saying more cash was only needed to hit stringent targets set by watchdogs.

‘We’ve met minimum capital requirements at all times and expect to continue to do so,’ he said. The bank made a £477.1m loss last year, a slight improvement on the £610.6m it lost in 2015.

This was partly down to a £36m hit from compensation for mis-sold PPI, along with a £10.4m bill after it realised that some customers had been paying incorrect amounts for their mortgages.

There was also an £80.1m charge from an aborted mortgage outsourcing deal with Capita, which triggered a row over delays and how much money should change hands.

The dispute was later resolved. However, the biggest concern is that day-to-day operations cost the bank £481m in 2016 – more than the total £448m it earned from customers. Chief executive Liam Coleman, 50, denied this was unsustainable, blaming record-low interest rates rather than mistakes made by the lender.

Coleman said the plan was to sell the bank as a whole rather than break it up.

The lender is now 80pcowned by US hedge funds after coming close to collapse in 2013. Last year, bosses slashed 800 jobs and closed 59 branches in an effort to cut costs.