Bank announces £610m loss

1 April 2016

The Co-op Bank announced its 2015 results today.

The headline is a loss of £610m. A big loss was widely flagged and anticipated. This provides a context for some of the actions by the bank recently.

Many media organisations also picked up on the £3.8m settlement for Chief Executive Niall Booker. This is in fact less than it might have been - in our campaign last year we pointed out it could be as much as £5m.

However, Save Our Bank has called on Mr Booker before to accept less pay, particularly in a situation when the bank is closing branches and colleagues are losing their jobs. We still call on him to do so. Someone has to break the cycle of spiralling executive pay.

Bank statement

In a statement to us on the results the bank said:

Key announcements

  ·     As  expected, the Bank recorded a loss before tax of £610.6m in 2015
     (£264.2m  in  2014)  as we continue to implement our turnaround plan.
     The  headline  figure  shows the continued impact of legacy issues on
     our financial performance, as well as our continued investment in our
     brand and operations.

  ·     Our  Core Bank remains on course to return to profitability in 2017.
     Overall performance of the Core Bank improved during 2015; the number
     of  mortgage completions more than doubled year-on-year and there was
     clear  stability  in  the  number  of  current accounts. Our customer
     service  excellence  was  maintained, with the Bank’s current account
     NPS  score  increasing  to  24  from 15, and with the Bank ranking #3
     among its peers, up from #4 in the first half of 2014.

  ·     Reinvestment  in  our  brand  continued in 2015 with the launch of a
     number  of  new  products guided by our revised, customer-led Ethical
     Policy,  which  was  launched  in  January  2015;  our  new overdraft
     proposition was launched in April 2015, a new balance transfer credit
     card  in  November  2015,  and  our  rewards based current account in
     January 2016.

Chief Executive Niall Booker commented:

“In  2015 we have been successful in improving capital resilience, reducing
costs  and  strengthening the performance of the Core Bank and the expected
widening  of our financial loss compared with 2014, due to legacy issues we
have  known  about  and highlighted for some time, should not distract from
the considerable progress made in turning the Bank around. The work done in
de-risking  and  simplifying  the  Bank means the business is much stronger
than  a  year  ago  and,  in particular, the continued strengthening of the
performance  of  our retail franchise is encouraging for the future. Whilst
the  Bank  as  a  whole  will report a loss before tax in 2016 and 2017, we
expect  a return to operating profitability in the Core Bank before the end
of 2017.

“The  introduction  of  more  competitive  products; a doubling of mortgage
completions  year  on  year; clear stability in current account numbers and
improved brand performance and customer relationship scores in 2015 provide
good  reasons  to  be  optimistic about the future and we will be investing
further  in  transforming  the  retail business in the year ahead. There is
still considerable work required to fully implement the Updated Plan but we
remain  positive  that  we  are gradually developing a more resilient bank,
distinguished  in the market by our values and ethics that can create value
for all our stakeholders over time.”