Co-operative Bank to axe more branches after annual losses more than double to £610.6million
- Credit: PA
The Co-operative Bank is to close 54 more branches this year, including three in Suffolk, after its annual losses more than doubled.
The troubled bank, which narrowly avoided collapse in 2013 after a £1.5billion black hole was discovered in its balance sheet, today posted a pre-tax loss of £610.6million for the 12 months to the end of December, up from £264.2m a year earlier, as it sufferd amid volatile markets and low interest rates.
However, the Co-op said the loss at its core bank, the parts of the business not affected by the discovery of the black hole, narrowed to £14.9m last year from £78.6m in 2014, and it expects to return of operating profitability during the second half of 2017.
Last year’s performance was helped by a 13.5% cut in operating costs as the Co-op closed 58 branches and cut more than 500 jobs. It now plans to axe a further 54 branches this year, including those in Felixstowe, which is due to close on May 19, and Stowmarket and Sudbury, both due to close on June 8.
“There are six roles at risk in the Felixstowe branch, seven at the Stowmarket branch and three at the Sudbury branch,” said a spokesman for the bank. “We’re working to keep job losses to a minimum and redeployment opportunities are being offered where possible.”
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The closures will leve the Co-op Bank with just two branches in Suffolk, in Ipswich and Bury St Edmunds, with the next nearest being in Colchester, Chelmsford, Cambridge and Norwich.
Liam Coleman, director for retail and commercial banking at the Co-op Bank, said: “We have always been very clear about the need to reduce the branch network to a size that is consistent with a smaller, sustainable bank as part of our business plan to turn the Bank around.
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“These decisions are never easy but continuing to reduce our costs is necessary as we seek to restructure and modernise the bank and, unfortunately, this includes closing branches where the number of transactions has declined significantly, meaning it is no longer sustainable.”
He added: “Although, like all banks, we will need to keep our branch network under review as the switch to digital increases, this is the last stage of significant branch closures as part of the bank’s transformation.
“We have sought to keep the impact on our customers to a minimum and are writing to affected customers giving them advance notice about these changes and the alternative options available to them.
“Alongside online and mobile banking facilities, all closing branches are within three miles of a Post Office branch where customers can undertake most day to day transactions, and in many cases much closer.”
Following the crisis of 2013, the Co-op Bank was rescued by bondholders, including US hedge funds, in a move which saw the wider Co-operative Group’s ownership of the bank reduced to a 20% stake.
Besides slashing branches, the bank has sold off many of its more risky assets and raised £250m of capital to strengthen its balance sheet.
Last year also saw the bank lose around 329,000 customer accounts, cutting the total of around 4.1m. Chairman Dennis Holt said today that the board remained “optimistic about the viability of the core bank franchise”, but added: “The transformation required to rebuild the Co-operative Bank as a viable alternative to other UK banks is not an easy task.”