Manchester-based Co-op Bank, which recently agreed to be acquired by Coventry Building Society for £780 million in cash, said on Friday its total income fell 6% to £249.6m in the six months ended June 30, 2024.
H1 underlying profit before tax fell 35% to £47.1 million.
Co-op Bank said its total assets remained stable at £26.1 billion, with new mortgage applications increasing to £2.6 billion, already exceeding applications across all of 2023.
Total liabilities remained stable at £24.7 billion over the period. Retail deposit balances increased to £15.9 billion (FY 23: £15.7bn) driven by an increase in savings balances, slightly offset by a reduction in average current account balances.
SME deposit balances fell 4% to £3.2 billion.
Co-op Bank CEO Nick Slape said: “In the first half of 2024, we have delivered an underlying profit before tax of £47.1m which is in line with expectations and we remain on track to achieve all our guidance metrics for the year.
“I am pleased to announce that we have successfully completed all migration activity in our Simplification programme, with only the decommissioning of the legacy estate left to complete in the second half of the year. This marks a key milestone in our plan to drive commercial value and operational resilience, while improving the customer experience.
“In May, we announced the signing of the sale and purchase agreement with Coventry Building Society. This will mark a return to mutualisation and follows the delivery of the strategy set in 2019 to turnaround the Bank by de-risking and simplifying, returning to profitability and delivering a liquidity event for shareholders.
“We have received an investment grade credit rating from Moody’s of Baa3, reflecting the achievement of sustainable profitability underpinned by a strong liquidity and capital base. In June, we returned to the covered bond market with a new £500m three year issuance, attracting healthy investor interest with an oversubscribed order book.
“This has all been delivered whilst building on our core franchise. Mortgage new business applications in the first six months of the year were more than double those in the same period last year, as were new retail savings account openings, and at the same time new personal current account openings showed a c.50% increase. Our resilient liabilities and healthy liquidity have also enabled us to continue with the prepayment of our TFSME funding, with £1.7bn now repaid.
“Looking ahead, we remain focused on delivering our strategy and providing a great service for our customers.”
Coventry Building Society has agreed to buy Co-operative Bank Holdings for £780 million in cash, as it looks to establish a national footprint and grow its banking, mortgages and savings business.
The deal is set to complete in the first quarter of 2025. £125 million of the purchase price will be deferred for three years from completion subject to the future performance of the bank.