Co-op Bank losses widen in Q3

(Sharecast News) - Losses at the Co-operative Bank widened in the third quarter as it took a hit from payment protection insurance claims.
Pre-tax losses widened 36% from the same period a year ago to £118.6m as the bank incurred a third-quarter PPI charge of £60m. In September, Co-op said it expected a further PPI provision of between £55m and £75m to be required in light of "substantially" greater volumes of complaints and enquiries than expected in the final month prior to the complaints deadline.

Net interest margin, a key measure of underlying profitability, fell to 1.76% from 2.07%, driven by sustained margin pressure.

However, the bank said core mortgage growth continued to be "strong", with balances up 3.4%, driven by £2.6bn of new business completions and increased levels of customer retention.

Chief executive Andrew Bester said: "We are continuing to make positive progress and delivering our plan in what is a challenging UK retail banking market, against ongoing economic uncertainty.

"While we have incurred charges in respect of higher than expected PPI complaints in the third quarter our underlying performance is encouraging and many of the issues that are key to our development in future years are being addressed. Significant improvements to our digital proposition, progress towards the separation of our IT infrastructure from the Co-op Group, and continued investment in our distinct ethical brand have supported our resilient business performance this quarter."