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Co-Op bank reduces losses despite shrinking account numbers

10 Août 2017

Britain's Co-operative Bank said on Thursday its $900 million rescue by investors was on track to conclude by September and would allow it to grow again, as its first-half losses narrowed to 135 million pounds ($175 million).

The bank said the restructuring deal agreed in June, which will see its main USA hedge fund investors swap their bondholdings for shares, is progressing to plan and is now on track to conclude by September. The Co-operative Group's stake in the bank will fall from 20% to about 1% as a result.

The bank said it had no plans to sell itself in the future.

In the six months to June 30, The Co-op Bank's net interest margin, a key measure of performance, fell to 1.32pc from 1.42pc a year ago.

Chief executive Liam Coleman said the completion of the restructuring would "secure the future of the Co-operative Bank as a viable stand-alone entity".

"Against this backdrop, business performance in the first half of 2017 has been resilient".

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Despite the loss of 25,000 customers, the bank still has 1.4 million current account holders.

The bank did not rule out further headcount reductions especially in areas such as temporary staff and contractors, having cut permanent staff by 897 to 3,313 in the past year.

"The vast majority of customers have remained very loyal as we have progressed the sale and capital raise process and I am extremely grateful for their ongoing support", he said.

However, the sale plan was dropped after its existing investors agreed to a rescue deal, which will see them swap their debt for a stake in the bank.

But he said it had proven "resilient", stating that while there is "more hard work ahead... this is a great bank and we are positive about the future".

Co-Op bank reduces losses despite shrinking account numbers