The scandal involving the former Co-op Group's chairman Paul Flowers, who was found to be embroiled in crack cocaine, crystal meth and ketamine-fuelled sex orgies, has prompted a number of customers to leave its bank.
According to a statement by the Co-op, the bank has lost current customers as a result of Flowers' scandal and that competition from other banks, and the introduction of seven-day account switching may have contributed "to an increase the bank has seen in the switching out of current accounts."
The Co-op Bank is one of UK's smallest lenders with 6.5 million customers and a 1.5% share of the current account market.
On 22 November, police arrested Flowers, as part of an investigation into the supply of illegal drugs.
According to a police statement, authorities confirmed that "Flowers has been taken to a police station in West Yorkshire where detectives will continue their enquiries."
On the same day, Chancellor George Osborne launched an independent inquiry into embattled Co-operative Bank as it is engulfed in controversy.
Meanwhile, the Co-op has launched a "root and branch" investigation into how the embattled lender is run after a video emerged of its former chairman, who is also a Methodist minister, handing over money to buy hard drugs.
The group pledged to review its "democratic structure" and stressed the need to "modernise" itself following a £1.5bn (€1.8bn, $2.5bn) black hole in its balance sheet .
"We need to modernise to ensure that the interests of all our seven million members are properly and directly represented in the oversight of our business activities," said the Co-op in a statement.
"Given the serious and wide-ranging nature of recent allegation, the new executive management team has started a fact-finding process to look into any inappropriate behaviour at the Co-operative Group or the Co-operative Bank and to take action as necessary."
The leader of the board that appointed Flowers, Len Wardle, has also resigned.
According to a statement by the Co-operative Group, Wardle has stepped down with immediate effect and will be replaced by Ursula Lidbetter.
"The recent revelations about the behaviour of Paul Flowers, the former chair of the Co-operative Bank, have raised a number of serious questions for both the bank and the group," said Wardle.
"I led the board that appointed Paul Flowers to lead the bank board and under those circumstances I feel that it is right that I step down now, ahead of my planned retirement in May next year.