Manchester-based Co-operative Bank plc said on Thursday it made a statutory loss before tax of £44.6 million in the six months ended June 30, 2020, compared to a loss of £38.5 million for the same period of 2019.

The bank took an impairment charge of £11.2 million “primarily due to the impacts COVID-19.”

Total income fell to £148.4 million from £191 million.

The self-styled “ethical bank” continues to recover from a number of scandals that resulted in a rescue by a group of hedge funds in recent years.

Bank analysts were intrigued to see Co-operative Bank saying in its results statement that it is committed “to being compliant with our £550m end-state MREL requirements by January 2022” with the next issuance of MREL-qualifying debt targeted for the second half of this year.

MREL stands for “Minimum Requirement for own funds and Eligible Liabilities.”

The bank added: “Although, the potential for a further deterioration in the economic environment creates risk and material uncertainty over our plans to issue MREL to meet future regulatory requirements.”

Co-op Bank CEO Andrew Bester expanded on the issue by saying: ” … this is a challenging market for all banks.

“Given the fall in the base rate to a historic low level in March, we have put in place a number of measures to reduce our operating costs and reprioritise our investment spend.

“This also means that issuing MREL-qualifying debt, an industry-wide regulatory requirement to build additional capital for the future, remains more challenging at the current time. 

“We delayed our plans to issue MREL in the first half of 2020 due to adverse wholesale market conditions and because our strong CET1 ratio allowed us to do so.

“Nevertheless, we are committed to achieving our future MREL obligations by January 2022, with the first issuance targeted before the end of this year, and our shareholders continue to be supportive.”