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.
In a statement to us on the results the bank said:
· 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
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
“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.”