"In 2019 we successfully completed the first stage of our five-year turnaround plan and our achievements have put in place a platform for growth for the years ahead."
The Bank set aside £96.6m to deliver transformation as part of its 'five-year turnaround plan' and also faced a further PPI charge of £62.5m.
As a result, the Bank's pre-tax losses rose from the £140.7m loss recorded in 2018.
Co-op Bank says its underlying loss was in line with expectations at £19.7m.
Despite its financial results, strong retail mortgage growth continues with net balances up 5%, driven by £3.8bn of new business completions and improved customer retention.
Andrew Bester, chief executive officer, said: “In 2019 we successfully completed the first stage of our five-year turnaround plan and our achievements have put in place a platform for growth for the years ahead. Our IT systems are now separated from the Co-op Group, we have a high-quality, low-risk loan book and our legacy assets are less than 5% of our balance sheet. While there is still work ahead, we have significantly improved our digital proposition and reinvested in our distinctive ethical brand. Our underlying losses are in line with expectations and the higher statutory loss reflects our investment in transformation and the impact of higher than expected levels of PPI claims felt industry-wide.
“Our core retail and SME banking performance shows our resilience in a competitive market. We delivered controlled mortgage balance growth aimed at protecting margins and saw increased retail deposits amongst our target customer base. Our SME business began a turnaround this year with deposit balances increasing in a competitive market. We believe this offers significant future growth potential and our funding award from the Banking Competition Remedies (BCR), together with investment of our own, is already helping us accelerate our plans. We are well-positioned to extend our propositions to our retail and SME customers, and I am delighted our customer service ratings have improved and that we were recognised as Most Trusted Mainstream Bank.
“Having tackled the legacy issues of the past, we now have the foundations for the Bank to grow and our brand presents real potential in a market where consumers want to drive change by seeking greener and more ethical choices. I am proud of what we’ve achieved and we now look to the future well positioned for the opportunities ahead.”
