Struggling Co-op Bank saw its losses narrow 24pc to £135m in the first half of the year despite thousands of customers closing their accounts amid fears over its future.
The ailing lender put itself up for sale earlier this year after reporting its fifth consecutive year in the red, only to fall back on a £700m cash injection from its hedge fund owners some months later, the Telegraph reports.
Uncertainty surrounding the process spooked some of the bank’s customers, with £400m of instant savings cash pulled and 25,000 customers closing their current accounts in the six months to June 30.
Deposits also fell by £1.5bn, with the bank pinning the blame on the “customer reaction to the bank’s announcements of its sale and capital raise processes” as well as wider influences such as low interest rates.
Despite jitters over its future, chief executive Liam Coleman thanked those who had remained loyal to the group during its restructuring and said he was “extremely grateful” to those that kept their accounts.
But the Manchester-based bank saw its workforce drop by around 900 during the period, with the number of part-time staff reduced by half compared to a year ago.
Mr Coleman warned on Thursday that more cuts would come, although most of those impacted will be temporary staff or will leave through natural attrition. The management team remain committed, he said.
Its common equity tier one ratio – an important yardstick of the bank’s stability – fell to 9.8 per cent from 11 per cent in December, which it said was a result of the first-half loss, while operating costs fell 9.9 per cent to £200.8m.
Mr Coleman said the bank’s performance had been “resilient”, with its additional fundraising due to be completed by September.
“This will secure the future of The Co-operative Bank as a viable stand-alone entity with greater capital strength enabling a new phase in its turnaround,” he said.
He added that the bank will continue using the Co-op name despite the Co-operative Group’s stake in the lender dropping from 20 per cent to about 1 per cent. The name is about “how we operate rather than ownership,” he said.
The Co-op Group’s ownership has all but disappeared since the hedge funds first bailed-out the lender in 2013, which at the time cut the Group’s 100 per cent stake to 20 per cent.