Co-operative Bank interim profits drop

26th Jul 2024 07:27

(Sharecast News) - The Co-operative Bank posted a drop in interim profits on Friday ahead of its planned merger with Coventry Building Society.

In the six months to 30 June, pre-tax profit declined to £24.2m from £61.8m in the same period a year earlier. Total income was down 6% to £249.6m and net interest income fell 6% to £229.5. This reflected reduced mortgage book margins although net interest margin remained stable at 184 basis points.

The bank said total underlying costs rose 6% to £205.4m, driven by annual salary increases, higher levels of customer fraud remediation, inflationary pressures and the Bank of England levy of £1.1m.

Nevertheless, the bank said "2024 will be a landmark year", marked by the delivery of its flagship multi-year transformation programme, the return to investment grade and shareholders signing the sale and purchase agreement to restore the bank to mutual ownership.

It was announced in April that Coventry Building Society would buy Co-op Bank in a £780m deal.

Chief executive Nick Slape said: "Mortgage new business applications in the first six months of the year were more than double those in the same period last year, as were new retail savings account openings, and at the same time new personal current account openings showed a circa 50% increase.

"Our resilient liabilities and healthy liquidity have also enabled us to continue with the prepayment of our TFSME funding, with £1.7bn now repaid. Looking ahead, we remain focused on delivering our strategy and providing a great service for our customers."