Co-operative Bank upgrades its outlook

Co-operative Bank in Manchester

The Co-operative Bank has upgraded its outlook for this year after a strong first half produced better-than-expected results.

The Manchester-headquartered group increased profits by £40m to £61.9m for the six months to June, which it said reflected “sustained quarter-on-quarter growth”.

Its performance builds on a strong 2021, when it recorded its first annual profit in a decade.

It is confident it has a stable balance sheet and low-risk portfolio that will provide the foundation for growth despite the economic backdrop.

Nick Slape

“We have made significant progress in the delivery of our strategy in the first half of 2022,” said Nick Slape, chief executive of the Co-operative Bank.

“These results are better than anticipated at the start of the year and therefore, looking ahead, we have upgraded our outlook for 2022 whilst increasing the investment to be made available for customer service and simplification initiatives.”

It has increased expected costs by £10m to £360m to fund this investment.

The Bank has also upgraded its net interest margin, to 155bps, to reflect “higher margins following the base rate improvements but with the expectation of continued lower mortgage margins”.

Earlier this year the Bank made a one-off payment to lower-paid staff, and has also committed to a £1,000 pay raise for 95% of its workforce from September.