THE Co-operative bank has warned it will take longer to rebuild its finances as annual losses more than doubled to £ 610.6million.
The lender, which nearly collapsed in 2013 when it announced a & pound; 1.5billion capital shortfall and pulled out of trying to buy more than 600 branches from Lloyds Banking Group, said it would remain in the red for the next two years.
But Niall Booker, the veteran former HSBC banker brought in as chief executive nearly three years ago, insisted "considerable progress" had been made and the core business should return to profit before the end of 2017.
The widening of losses from & pound; 264.2million in 2014 was due partly to a near-doubling of misconduct changes to & pound; 193.7million including extra provisions of & pound; 71.8million for payment protection insurance mis-selling.
The bank also took a & pound; 121.4million hit on the disposal of non-core assets and increased spending on its turnaround plan, which last year included the closure of 58 branches and 18 per cent reduction in permanent staff numbers to 4470.
A further 54 branches will close this year.
The overall number of current accounts was down by 799 to 143 million compared with an outflow of 66340 the previous year.
Last year's loss and a low interest rate environment mean it will take a year longer than expected for the bank to reach the capital strength required by regulators. Its revised plan stretches to 2020.
There was no update on a possible successor to Booker, whose annual pay including incentives jumped nearly 25 per cent to & pound; 385million and whose contract runs until the end of this year.
Booker said: "The work done in de-risking and simplifying the bank means the business is much stronger than a year ago and, in particular, the continued strengthening of the performance of our retail franchise is encouraging.
"While the bank as a whole will report a pre-tax loss in 2016 and 2017 we expect a return to operating profit in the core bank before the end of 2017. We will be investing further in the year ahead, but there is still considerable work required to fully implement the updated plan. "
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