Part of the increased, first-half loss was due to the bank raising the amount it is spending on putting things right to £101 million, along with losses on the sale of unwanted assets.
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And last week, a regulatory report criticised the Co-op Bank for misleading investors.The bank escaped a fine, however, because the regulator said it needed all the money it has to strengthen its balance sheet.
The Co-op boss said: “Although the core bank remains a work in progress, its performance is already beginning to improve”.
In a statement, they said that these losses are thanks to “the issues that came to light during 2013” which “continue to dominate the financial performance of the business”.
He added: “The investigations by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) into what went wrong at the Bank are very important and the Board takes the terms of their recent notices and public censures extremely seriously”.
The numbers of current account holders quitting the business has reduced markedly from the 62,646 who left in the first half of 2014 on a net basis, although the Co-op revealed that it still saw a net 2,250 leave in the six months to the end of June.
Despite widened losses, Co-op Bank chief executive Niall Booker said the lenders turnaround drive was on course and the bank is now in better shape to withstand an economic downturn.
The bank is cutting dozens of branches, selling assets and last year cut 15% of its workforce as part of its turnaround plan.
It also put by another £49m to cover potential compensation claims and legal charges, such as packaged accounts and issues relating to the consumer credit act. After the Co-operative bank admitted to a £1.5bn “black hole” in its finances, the company was plagued by another scandal when it surfaced that its chairman Paul Flowers was a user of ketamine, GHB and other drugs. This was up from £38.6m a year earlier. “We talk to people from time to time”, he said.
The CEO also warned that the bank’s recovery from its near-collapse in 2013, which stemmed from bad commercial real estate loans, remained challenging.
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He said that the alternative of a stock-market flotation of the bank remains “an option but it will be a bit of time before we are ready for that”.
