Investment accounts
Adult accounts
Child accounts
Choosing Fidelity
Choosing Fidelity
Why invest with us Current offers Fees and charges Open an account Transfer investments
Financial advice & support
Fidelity’s Services
Fidelity’s Services
Financial advice Retirement Wealth Management Investor Centre (London) Bereavement
Guidance and tools
Guidance and tools
Choosing investments Choosing accounts ISA calculator Retirement calculators
Share dealing
Choose your shares
Tools and information
Tools and information
Share prices and markets Chart and compare shares Stock market news Shareholder perks IPOs and placings
Pensions & retirement
Pensions, tax & tools
Saving for retirement
Approaching / In retirement
Approaching / In retirement
Speak to a specialist Creating a retirement plan Taking tax-free cash Pension drawdown Annuities Investing in retirement Investment Pathways
Co-op Bank profits slide after rise in redress costs and expenses
(Sharecast News) - The Co-operative Bank reported an underlying profit of £120.9m in its full-year results on Wednesday, down from £136m year-on-year, with a net interest margin of 180 basis points, making for a 14 basis point increase compared to 2022. Despite facing exceptional redress costs of £28.9m related to legacy business, alongside strategic transformation and advisory expenses amounting to £22.5m, the bank said it still managed to achieve a statutory profit of £71.4m, sliding from £132.6m year-on-year.
The bank, owned by a number of funds and with its debt securities listed in London, said it was in a strong liquidity position, with the pillar one liquidity coverage ratio (LCR) standing at 195.4%, and a 12-month rolling average LCR of 211.4%.
It also reported resilient customer credit quality, maintaining low accounts greater than three months in arrears.
Additionally, the Co-operative Bank highlighted its intention to start dividend distributions, supported by its robust capital position.
With a common equity tier 1 (CET1) ratio of 20.4%, well above the regulatory minimum, the bank said it remained well-capitalised.
Looking ahead, the bank said it would focus on current accounts and deposits, mortgages, and small-to-medium enterprise (SME) lending in 2024.
The second phase of its strategy, 'embed and expand', aimed to build on the progress made in the prior year, with a renewed emphasis on operating model transformation and ESG and ethical banking propositions.
Its financial outlook for 2024 included a net interest margin of about 185 basis points, total statutory costs of around £410m, and a return on tangible equity of around 10%.
"2023 has been a year of transformation and I am extremely proud of what we have achieved," said chief executive officer Nick Slape.
"The underlying profit before tax of £120.9m reflects our strong, sustainable and low risk business model, while statutory profit before tax of £71.4m was impacted by exceptional redress on legacy mortgage business, strategic transformation and advisor costs.
"We have made significant progress on our IT simplification programme, including successfully in-housing our mortgage servicing capabilities, going live with our new cloud based mortgage platform and completing 67% of our savings migration."
Slape said the bank had made an "excellent start" to 2024.
"We received over 12,500 new current account applications in January, representing an increase of over 300% versus the same period last year.
"New mortgage origination has also been strong with £1.2bn applications in January.
"Looking to the future, whilst the economic outlook remains uncertain, the bank is well positioned with a low risk balance sheet and strong capital and liquidity positions."
Reporting by Josh White for Sharecast.com.
Share this article
Related Sharecast Articles
Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.
Award-winning online share dealing
Search, compare and select from thousands of shares.
Expert insights into investing your money
Our team of experts explore the world of share dealing.
Policies and important information
Accessibility | Conflicts of interest statement | Consumer Duty Target Market | Consumer Duty Value Assessment Statement | Cookie policy | Diversity and Inclusion | Doing Business with Fidelity | Fidelity gender pay report | Investing in Fidelity funds | Legal information | Modern slavery | Mutual respect policy | Privacy statement | Remuneration policy | Security | Statutory and Regulatory disclosures | Whistleblowing policy
Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
This website is issued by Financial Administration Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) (FCA Register number 122169) and registered in England and Wales under company number 1629709 whose registered address is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP.