Co-op trims H1 losses to £177m

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The Co-operative Bank made a loss of £177m in the first half of the year, compared to a loss of £204.2m in the same period of 2015.

The lender says its performance has been hit by legacy issues and business investment costs, including investment in digital banking and IT.

The bank completed £1.5bn of mortgages in the first half, up from £1.1bn in the first six months of last year.

Around 86 per cent of the Co-op’s lending was done through brokers, flat compared to 87.2 per cent in H1 2015.

The bank says it has seen no immediate impact from Brexit.

However, it adds that the future could see the bank being hit by post-Brexit fallout including a shrinking of the UK mortgage market affecting its growth.

Co-operative Bank chief executive Niall Booker says: “As noted by others, today’s market conditions are challenging for all retail-focused banks and the macroeconomic uncertainty following the result of the EU referendum, including the likelihood of lower for longer interest rates, may restrict our ability to grow revenue in the short term.

“As we’ve said many times before, addressing the Bank’s historic legacy issues will continue to impact our overall financial performance until the end of our plan period.

“Spending on the continued delivery of our significant remediation and transformation projects has been higher than planned during the first half of the year but the bulk of this spending is offset by other one-time gains in H1.

“The increasing focus of future project spend will be on those projects generating a positive net present value, and which are more focused on business needs going forward than remediating past problems. This is positive.”

The firm’s current deputy chairman, Liam Coleman, will take over as chief executive when Booker steps down on 31 December 2016.