Co-op Bank narrows losses but remains deep in the red
The Co-operative Bank narrowed its losses in the third quarter, putting the lender on course for a better year than in 2019, despite the coronavirus pandemic.
The bank’s statutory loss before tax in the third quarter was £23.5m, it said in a trading update today.
That was down sharply from a loss of £80.1m in the same period in 2019 but up from a £17.6m deficit in the second quarter.
For the nine months to the end of September, the Co-op Bank suffered losses of £68.1m, although that was an improvement from losses of £118.6m in the same period a year earlier.
However, the lender remained deep in the red amid the coronavirus pandemic and severe economic downturn.
Its net interest income dropped to £195.2m in the nine month period, from £243.9m a year earlier. This reflected the Bank of England’s decision to cut interest rates to record-low levels to try to boost lending.
The bank’s new chief executive Nick Slape said: “This is a challenging time for all banks, given the uncertain economic outlook and continuing low base rate.”
“We remain loss making as anticipated in our plan,” he said. He added that “the results also show our resilience as we continue to make significant progress in our turnaround.”
Slape took over at the long-suffering bank last month, making him the sixth boss in nine years.
He inherited a difficult hand: the bank was already loss-making going into the coronavirus crisis and has been forced to cut 18 branches and slash 350 jobs.
England is now in a month-long second lockdown. Lenders are bracing themselves for another hit to the economy.
Co-op Bank lent more for mortgages than anticipated in the third quarter, at £530m. Slape said the government’s “holiday” on the stamp duty property tax had helped this area.
The lender, which sells itself as an ethical bank, highlighted the support it had offered businesses and households during coronavirus.
It granted 20,000 payment deferrals across mortgages, loans and credit cards. It also lent £225m to small and medium-sized business on net, with £84m lent through the main coronavirus business loan schemes.