The Co-Operative Bank saw its losses more than double in the last financial year as the lender faced the cost of dealing with higher misconduct charges. In the 12 months to 31 December 2015, the London-listed company posted an annual loss of £610m (€769m, $875.5m) compared with losses of £236m in the corresponding period in 2014, as conduct charges increased over the year by £92.5m to £193.7m after the bank had to set aside further provisions for payment protection insurance.
Group chief executive Niall Booker warned the group will face an uphill battle in 2016 and is expected to continue to post losses but he insisted the bank's core operations were in better health than 12 months ago. Booker, who came under intense scrutiny in May last year when it was announced he could be in line to pocket as much as £5m under a new pay deal, said the bank's core business had cuts its losses from £76m to £15m over the last 12 months.
The Co-operative Bank was brought back from the brink in 2013 after a £1.5bn black hole had emerged and Booker said the latest figure pointed to a steady improvement which could see the core division return to profit next year.
"In 2015 we have been successful in improving capital resilience, reducing costs and strengthening the performance of the core bank," he said. "The expected widening of our financial loss compared with 2014, due to legacy issues we have known about and highlighted for some time, should not distract from the considerable progress made in turning the bank around."
Meanwhile, the bank added its cost had remained high throughout the year, as a result of investments aimed at simplifying and modernise its IT systems.