The Co-operative Bank has posted a pre-tax loss of £204.2m for the first half of the year and set aside a further £49m to cover the cost of missold mortgages, packaged bank accounts and loan failures.
The bank’s interim results, published last week, show the Co-op increased its losses from £77m in June 2014. It says the losses have been driven in part by net losses on asset sales of £38.2m as it tries to shed non-core assets to boost its capital.
The bank has increased existing provisions by £49m for a range of “conduct issues”. The sum comprises £20m in interest received by the Co-op on unsecured loans that did not comply with the Consumer Credit Act, which will be refunded to customers. An extra £15m has been set aside for redress relating to the way the Co-op miscalculated mortgage payments and fees, as well as on unsecured loans. Another £16.8m has been earmarked for missold packaged bank accounts.
Co-op Bank chief executive Niall Booker says: “Customer redress on the larger mortgages and Consumer Credit Act programmes has progressed in H1 with the launch of IT-based solutions to improve the pace of customer contact.
“We intend to have substantially progressed the majority of conduct redress and remediation issues by the end of 2015.”