No profit in 2015 or 2016 says the Co operative Bank

The Co-operative Bank has said it won't make a profit in 2015 or 2016.

The announcement follows the release of figures for the first half of the year, which show pre-tax losses of £204.2 million for the period. That's compared to £77 million in losses for the year earlier.

Despite the high loss figure, the bank says the results were slightly better than expected and that the company is now in a better position to withstand economic stresses.

In 2013, the bank almost collapsed after a £1.5 billion "black hole" was discovered in its accounts, reports the BBC. That year, the firm saw the biggest loss in its 150-year history – £2.3 billion.

Outside investors were called in to prop up the bank and 80 per cent of the company is now owned by hedge funds. The Co-op Group holds the remaining 20 per cent.

Commenting on the possibility of floating shares of the Co-op Bank on the stock market, chief executive Niall Booker said such a move was unlikely until the business was closer to turning a profit – something he doesn't expect to happen in the near future.

"We won't be profitable in 2015 and we won't be profitable in 2016," he said.

A series of difficulties

Recently, the Co-operative bank has suffered a series of difficulties.

Earlier this year, the bank set aside £49 million to cover misconduct and legal charges. The company lost £38.2 million on the sales of assets needed to reduce overall levels of debt and spent £33.1 million on improving "systems and processes".

The bank has received criticism for misleading investors. However, the regulator did not issue a fine, saying the company needed all the money it has to strengthen its balance sheet.

Last year, the bank failed a Bank of England stress test and a number of top executives have left the bank over the last five years – including former chairman Paul Flowers. He left the firm following a drugs scandal.

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.