CUSTOMER EXODUS
The red ink has continued at embattled Co-operative Bank as the lender yesterday put out its first earnings report since it recently sealed a £700 million rescue deal with investors.
On the plus side, Co-op Bank reduced its losses to £135.2m in the six months to end-june, down from £177m a year earlier. But, showing the group is not out of the woods, it revealed that the haemorrhaging of customers and cash goes on against a backcloth of uncertainty about the financial lifeline thrown to it by the former mutual’s hedge fund investors.
Co-op Bank said it had lost about another 25,000 current account customers since the end of 2016 and that £400m of instant access savings cash had been pulled out of the bank.
The lender, which has struggled since a £1.5 billion shortfall was discovered in its balance sheet in 2013, put itself up for sale earlier this year before the rescue deal was agreed with the hedge funds and bondholders.
Co-op Bank said yesterday that its latest six-month trad-
0 The bank’s current account numbers have fallen 2% to 1.4 million
LIAM COLEMAN, CEO ing performance had been hit by “retail customer reaction to uncertainty” before and after that deal was agreed in June.
Despite the latest losses, which were widely flagged, Co-op Bank chief executive Liam Coleman said the business had put in a “resilient” performance.
Coleman said: “The vast majority of customers have remained very loyal as we have progressed the sale and capital raise process and I am extremely grateful for their ongoing support.
“Of course, there is more hard work ahead, and, like other banks, we recognise there are risks to the UK economy, but this is a great bank and we are positive about the future.”
Under the refinancing package agreed with its investors, which is expected to complete next month, the wider Co-op Group, whose businesses include food retail and funeral directors, will see its residual stake in the finance arm contract from 20 per cent to 1 per cent.
“The vast majority of customers have remained very loyal as we have progressed the capital raise process and I am extremely grateful.”