Co-op Bank posts first annual profit in a decade

Co-op Bank

The Co-operative Bank has announced its first annual profit in a decade.

The Manchester-based bank achieved a statutory pre-tax profit of £31.1m for the year to December 31, 2021, compared with a pre-tax loss of £103.7m the previous year.

Total income was £361.5m, up from £307.3m.

In 2020 the bank incurred restructuring costs of £20m.

Total assets increased by £3.7bn since fiscal year 2020 largely due to £2.4bn net mortgage lending and higher cash balances. Legacy assets have reduced by nine per cent to £0.7bn.

Total liabilities have increased by £3.5bn since 2020. In the year the bank has drawn a further £3.5bn TFSME funding – a Bank of England scheme allowing banks and building societies to access four-year funding at rates very close to Bank Rate – taking total drawing to £5.2bn. Customer deposits are £0.8bn higher than at December 31, 2020.

The bank also confirmed that it will complete the in-housing of all its mortgage services this year.

Chief executive, Nick Slape, said: “2021 has been a milestone year for The Co-operative Bank, in which we have delivered against the ambitious turnaround plan set three years ago to significantly improve the financial strength and stability of the bank.

“I am delighted to report our first full year of profit in 10 years, signalling a return to sustainable profitability, with a statutory profit before tax of £31.1m. These positive results demonstrate that our position on ethical and social matters is not only good for our communities, but also delivers strong commercial outcomes.”

The bank’s Environmental Social and Governance (ESG) credentials have received external validation from Sustainalytics, a leading ESG ratings agency, which identified it as the UK’s best ESG rated high street bank.

Nick Slape

Mr Slape said: “In August, we launched our sixth Values and Ethics poll, a unique consultation of the environmental and social issues that are important to our customers and colleagues. We will use their responses to inform and update our unique Ethical Policy – which guides how we do business and the causes we support – and will be relaunched later this year.

“Our return to profitability and balance sheet growth at improved margins gives us a strong platform for further growth in the years ahead. As ethics and sustainability become increasingly important to consumers, we are working to enhance our product range and services in 2022 as now, more than ever, there is an important role for an ethical bank like us in the marketplace.

“We are working more efficiently and effectively and in the year ahead we will complete the in-housing of all mortgage servicing as we continue to take steps to transform our operations, focused on delivering for our customers.

“This, along with increased cost efficiency, gives me the confidence that the bank’s business model, refreshed strategic vision and our stable management team take us forward into our 150th year of ethical banking in a strong position.”

Mr Slape added: “We have achieved a lot this year, but there is still a lot to do as we build a simpler, more efficient bank with co-operative values at its heart. I am confident about the future and our ability to deliver our strategic goals despite economic uncertainty remaining.”

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