Co-operative Bank says making progress with turnaround plan

cooperative bank

In a first-quarter trading statement, reported by Reuters the British bank said it had completed a 1.5 billion pounds residential mortgage securitisation earlier this month as part of a broader deleveraging plan to improve its resilience.

This securitisation would have increased the bank’s core equity tier one capital position at Dec. 31 by approximately 0.9 percent to 13.9 percent, the bank said.

Co-op said it was on track to hit revised deleveraging targets as set by regulators following Bank of England stress tests as well as deal with legacy conduct issues.

“There is considerable work ahead to address legacy issues across all areas of the business,” Chief Executive, Niall Booker said.

“Furthermore, the Bank remains exposed to external macroeconomic conditions, including the timing of future interest rate rises and market conditions to support successful asset disposals, but we are pleased with the progress management has made in the areas we control and in what remains the early stage of our recovery.”

It is planning a range of measures to further reduce costs in 2015 through improved processes, outsourcing some back office functions and shrinking its ATM network.

The bank’s current account franchise remained broadly stable throughout the first quarter of 2015 and net interest income rose slightly ahead of expectations due to a number of pricing actions on retail deposits that lowered funding costs.

Mortgage applications and completions over the period exceeded expectations, with completions totalling 500 million pounds.