Co-operative Bank loses £140.7m but ups mortgage lending

Ryan Bembridge

February 28, 2019

Co-operative Bank increased its mortgage activity in 2018 but still posted a pre-tax loss of £140.7m.

While this is a substantial it represents an improved result from 2017, when the bank lost £174.4m.

Co-op Bank increased mortgage completions to £4.3bn in 2018 from £3.4bn in 2017, while net lending rose to £1.4bn in 2018 from £100m in 2017.

Andrew Bester, its chief executive, said: “I would particularly like to highlight the resilient performance of our Platform mortgage business over the year.

“Despite a very competitive mortgage market, we achieved our highest volume of mortgage completions since 2010. This lending has been safe and of high quality.

“Our success is the result of a focused pricing strategy and emphasis on adviser service. New products have been introduced that are designed to support first-time buyers, including Help to Buy and higher loan-to-value lending products.

“We have also been able to retain increased numbers of existing mortgage customers.”

The bank achieved its first operating profit for five years, achieving profit of £14.9m after losing £84m in 2017.

Co-op Bank is trying to turn around its fortunes after being rescued by hedge funds and other investors for £700m in 2017.

Money is being spent on migrating the bank’s IT systems from Co-operative Group – which owns just 1% of the bank – which is said to be central to de-risking the bank. This process started in 2017 and is expected to conclude this year.

The cost of so-called ‘strategic projects’, which is thought to include the cost of this IT migration, rose to £94.3m in 2018, from £53.3m the year before.

Bester added: “It is clear that the bank has overcome significant difficulties in recent years and that sizeable progress has been made in its turnaround.

“We are now well capitalised and have a safe foundation on which to build.”

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