Co-op Bank reports amid tough times

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The Co-operative Bank will today publish its first set of financial results since it reported a £1.3 billion loss for 2013 in a disastrous year for the lender that saw it face the brink of collapse.

Results for the first half of this year should shed light on its progress since a rescue that saw the wider Co-op group cede majority ownership of the bank to bondholders including US hedge funds.

The lender’s woes followed the discovery of a £1.5 billion hole in its balance sheet.

Publishing annual results in April, the firm apologised for its past failings and warned that a return to the black was unlikely before 2016. Niall Booker, who became chief executive in June last year, said then that it still had “significant issues” to resolve.

A scathing report earlier this year into the bank’s near-collapse by former Treasury mandarin Sir Christopher Kelly pinned the blame on toxic loans inherited from its disastrous merger with the Britannia building society.

It laid bare a “sorry story” of multiple management failures and painted a picture of the bank’s culture in which an “acceptance of mediocrity” took hold.

The business has been at the heart of the wider Co-op group’s difficulties as it faced the worst crisis in its history, during a period that also saw a drugs scandal involving the bank’s former chairman Paul Flowers. It saw the group slump to a record full-year loss of £2.5 billion and its 100% control of the lender shrink to 20%.

In June, the bank launched a poll of nearly five million customers as it updated its ethical policy, insisting that despite slipping from the control of the Co-operative Group, ethics remained central to its identity.

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