Co-op Bank narrows losses as recovery continues

THE CO-OP Bank narrowed losses for the first nine months of the year, as the lender continues along the road to recovery since striking a rescue deal with hedge funds last year.

Pre-tax losses came in at £87m in the period, a £20.7m improvement compared to the £107.7m loss it booked in the same period last year.

The group benefited from lower costs as it also posted an operating profit of £14.3m, which is £39.6m better than in 2017.

Operating costs were down 14 per cent, driven by a “continued focus” on efficiency, as well as an improvement in its net interest margin.

Chief executive Andrew Bester, who joined the firm in July, said: “This is the first time the bank has published a quarterly update since quarter three 2016 following the recapitalisation in September 2017.

“The bank has had a positive third quarter, and despite continued competition in the market, our mortgage originations have remained strong with the highest quarter of completions in five years.”

The bank said it is on course to exceed the £3.2bn of mortgage completions recorded in 2017.

Last year, the Co-op Bank pushed through a £700m deal that saved the troubled lender from a potential collapse.

The refinancing and restructuring package agreed to by the Co-op Bank’s hedge fund investors – which include Silver Point Capital, GoldenTree, Anchorage Capital, Blue Mountain and Cyrus Capital – saw the bank effectively sever its historic relationship with the Co-operative Group and separate itself from the wider mutual’s pension scheme.

The rescue package gives Coop Bank the ability to meet regulations on long-term capital requirements.