Co-op Swings To £559m Loss On Bank Troubles

The Co-operative group has swung to a half-year pre-tax loss of £559m amid a writedown of £496m on loans at its troubled banking arm.

The Co-operative Bank alone made a pre-tax loss of £709m in the six months to June and the group said there will be "no quick fixes" as it embarks on a four-year turnaround plan.

The company employs more than 100,000 people, but warned a restructuring of the business makes job losses "inevitable".

Group chief executive Euan Sutherland said: "This has been a very difficult first half for The Co-operative Group and the results highlight both the well-documented challenges faced by The Co-operative Bank and the significant work to do at Group level.

"Importantly, today's announcement also underlines the need for the £1.5bn Capital Action Plan we announced in June to stabilise the Bank, which we reaffirm today and which remains on track."

He said the Co-op has "no plan B" for rescuing the bank and is confident bond holders will accept the current proposals.

He added: "We remain convinced of the considerable potential to be realised across the Group and are confident that we are well placed to restore the Co-operative brand to its rightful place at the heart of communities up and down Britain." 

Mr Sutherland took his position in May and said he has been focused on stabilising the bank since becoming the company's boss.

Banking Group chief executive Niall Booker explained that the business continued to see the withdrawal of corporate deposits, while retail customers remained.

Other parts of the business reported profits, with the Co-op's food group making £117m in the same period.

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