This morning the Manchester based Co-operative Bank confirmed that it made a £1.3bn loss in 2013 and follows a £1.5bn black hole found in in its balance sheet causing a near collapse of the bank and last year’s failure to buy 632 branches from Lloyds Bank.
Parent company the Co-operative Group surrendered control of the bank to US hedge funds last year leading to a rescue in December although the bank does not now expect to report a profit until 2016.
The bank has revealed that it will not be paying out the previously suggested £5m in bonuses to directors and former executives who left the bank last year and apologised to its customers.
Chief executive Niall Booker said:
“The results today reflect the magnitude of the issues that have come to light since I joined The Co-operative Bank ten months ago. In addition, as we outlined on the 24 March 2014, further costs have materialised since the completion of the liability management exercise (LME) in December 2013 as a result of a continuing review of The Co-operative Bank’s legacy operations, assets and liabilities by the new executive team.”
Mr Booker continued:
“It is early days but initial progress on our business plan is encouraging and we remain enthusiastic about the long term potential for the bank. We have started to simplify the business; we are reducing costs and are currently ahead of schedule in de-risking our assets.
“We are also beginning to fix the fundamentals of the bank as we drive the change needed to return to our roots as a bank focused on our retail and SME customers.
“We appreciate that customers and other stakeholders continue to feel angry about how past failings placed the future of the business so seriously at risk. I would like to apologise to them, to thank them for their continued loyalty and to thank colleagues for their commitment during such difficult times.”