Co-op
The Co-operative Bank has seen its yearly profit nearly halve after it set aside cash to compensate mortgage customers from more than a decade ago, while the lender said it is still in talks with Coventry Building Society over a possible tie-up.
The Manchester based bank, which has about 2.6 million customers and says it is the UK’s leading ethical bank, said 2023 had been “a year of transformation” as it spent more money on improving its own systems. It reported a pre-tax profit of £71.4m for 2023, shrinking from the £132.6m it made in 2022.
The business said the decline was driven by one-off costs during the year. It set aside nearly £29m to cover the costs of a redress scheme to compensate mortgage customers from 2011 and 2012.
It followed complaints being upheld by the Financial Ombudsman Service relating to an increase in the rate of its standard variable mortgage rate, which most people move to once their fixed-term deal comes to an end.
Co-op Bank said it had decided to compensate customers who might have been affected, regardless of whether or not they had complained. It also revealed it spent about £15 million on improving how it manages savings and loans, and around £8 million on advisory costs relating to a strategic review of the business. Staff costs jumped by a fifth as it invested in contact centres, and wages were pushed higher by inflation.
Chief executive Nick Slape said: “2023 has been a year of transformation and I am extremely proud of what we have achieved. We are ever mindful of the financial challenges that the current economic climate poses for a number of customers and we will continue to support them where needed.”
The proportion of customers who were more than three months in arrears on their payments rose from 0.13% in 2022 to 0.21% in 2023, but remained low. The bank said it is aware of the risk of more customers falling behind on their repayments, particularly with the level of unemployment in the UK expected to rise this year.
Meanwhile, Mr Slape said the bank continues to be in “exclusive discussions” with Coventry Building Society over a possible merger of the two high street lenders, which was first announced at the end of last year. “These discussions remain ongoing as we continue to evaluate the merits of the combination,” he said.
Co-operative Bank has been at the centre of takeover speculation, having returned to profit two years ago under the leadership of Mr Slape who steered the group’s turnaround. It is no longer part of the wider Co-operative Group, from which it parted ways in 2017.
News Related-
Pedestrian in his 70s dies after being struck by a lorry in Co Laois
-
Vermont shooting updates: Burlington police reveal suspect’s eerie reaction to arrest
-
Grace Dent says her ‘heart is broken’ as she exits I’m A Celebrity early
-
Stromer’s ST3 Urban E-Bike Goes Fancy With Minimalist Design, Modern Tech
-
Under-pressure Justice Minister announces review of the use of force for gardaí
-
My appearance has changed because of ageing, says Jennifer Lawrence
-
Man allegedly stabbed in the head during row in Co Wexford direct provision centre
-
Children escape without injury after petrol bomb allegedly thrown at house in Cork City
-
Wexford gardai investigating assault as man is bitten in the face during Main Street altercation
-
Child minder’s husband handed eight year sentence for abusing two children
-
The full list of the best London restaurants, cafes and takeaways revealed at the Good Food Awards
-
Mazda CEO Says EVs 'Not Taking Off' In The U.S.—Except Teslas
-
Leitrim locals set up checkpoint to deter asylum seekers
-
Ask A Doctor: Can You Get Shingles More Than Once?