Co-operative Bank reveals £26m profit nosedive

Co-operative Bank has revealed its operating profit dived by £26m to £50.4m last year, after it was forced to writedown £31.8m in investments.

The bank’s annual results, for the 12 months up to January 12 this year, show that its pre-tax operating profit dropped to £50.4m from £76.3m in 2006.

The results were published as part of the overall results for the bank’s parent company, Co-operative Financial Services, which reported an overall profit rise to £155.4m for 2007 from £146.2m in 2006.

Co-operative Bank stresses that, excluding the market conditions that led to its investment writedowns, its banking profit increased by £5.9m from £76.3m in 2006 to £82.2m for 2007.

The results statement says the bank’s funding is overwhelmingly from retail and corporate deposits rather than financial markets.

The bank says it saw growth in lending and deposit balances, particularly in the corporate sector.

David Anderson, chief executive of CFS, says: “This is a very satisfactory trading performance and highlights the fundamental strength of our business, the quality and professionalism of our staff and a clear business strategy which is enabling us to invest in the right business areas.

“Throughout 2007 we continued to demonstrate leadership in areas of customer service and corporate social responsibility, which co-operative members and customers rightly expect of us.”