7 March 2025 - The Co-operative
Bank's 2024 Financial Results
2024 was a strong year with
financial performance in line with expectations and significant
progress made in simplifying the Bank's IT infrastructure, whilst
continuing to deliver for customers. This was alongside taking the
Bank back into mutual ownership with the completion of the
acquisition by Coventry Building Society.
Commenting on these results,
Steve Hughes, interim Chief Executive of the Co-operative Bank,
said:
"I am delighted to welcome The Co-operative Bank to Coventry
Building Society, bringing the original ethical bank once again
into the ownership of a mutual organisation. In these first weeks as interim Chief Executive Officer, I
have been hugely impressed by the dedication of my new colleagues
in serving our customers at a time of significant
change.
For
many reasons, 2024 was an important year. The Bank has made
significant progress in simplifying its IT infrastructure,
delivering the commitment to exit legacy platforms and datacentres
and bring £19 billion of mortgage balances and £5 billion of
savings balances onto a single system.
It is
very encouraging to see that the Bank's improved financial strength
has been recognised externally resulting in a number of credit
rating upgrades, and driving a return to investment grade once
again. The Bank is operationally and
financially resilient, with a strong capital and liquidity profile
and partnerships in place that align to its co-operative values and
ethics. It has shown continued progress in a period of considerable
business change, and I would like to thank Nick Slape and his team
for their leadership of the business during this period of
turnaround. "
Financial performance in line with
expectations
· Underlying profit before tax
of £116.2m (FY 23 £120.9m). Reduction due to lower net interest income as a result of
lower mortgage margins and increased savings rates, which has been
partially offset by the Bank's structural hedge. Despite ongoing
impacts of previous high levels of inflation and an increase in
customer fraud remediation costs, the Bank's underlying costs
reduced 1% to £390.7m (FY 23: £393.7m).
· Significant surplus to all
prudential measures. CET1 ratio of
18.7% provides 4.4% headroom to minimum CET1 requirements,
including CRD IV buffers (14.3%). The Bank maintains a healthy LCR
ratio of 192.4%, supported by a benchmark £500m three-year covered
bond issuance.
Growing customer
franchise
· Mortgage applications
increased by over 50% to £3.44bn (FY 23: £2.26bn).
The simplification of the Bank's IT infrastructure
through multiple years of work has enabled the Bank to react faster
and capitalise on improving margins in early 2024, whilst also
enabling the Bank to offer larger mortgage loans; as a result
average loan size has increased to £207k (FY 23: £159k), supporting
Bank income. SME remains a key part of the Bank's strategy and
through targeted growth, underlying SME net lending has increased
44% to £312m (FY 23: £216m).
· Positive net current account
switching for the first time in over 10 years.
The Bank launched several switching campaigns in
2024, most notably the 'switch & save' and 'switch & stay'
campaigns, which centre on attracting and retaining customers whose
values align with ours.
Delivering our
strategy
· Significant progress
simplifying the Bank's IT infrastructure.
Exited legacy platforms and datacentres and
bringing £19 billion of mortgage balances and £5 billion of savings
balances onto a single system. This allows improved scalability and
speed to market whilst facilitating cost efficiencies.
· Investment credit rating
achieved (Moody's: A3, Fitch: BBB+). A reflection of the Bank's sustainable profitability,
underpinned by a strong liquidity and capital
base.
Delivering for our
customers
· Customer service continues to
improve. The Bank's Trust Pilot
score was maintained at 4.1 (Great) and is the first ever
organisation to be awarded the Gold Compassionate Customer Care
Award by Hospice UK. In SME, we significantly improved the customer
journey, resulting in higher application conversion rates and new
current account and savings customers.
· Co-operative values at the
forefront under the three pillars of our customer-led Ethical
Policy - Planet, People and Community. Net Zero Transition Plan developed in 2024 with clear
commitments and milestones established to keep the Bank accountable
on its progress to achieve Net Zero; raising £129,169 with
colleagues and customers to end youth homelessness with
Centrepoint; continuing to provide free banking services to
Community Directplus customers.
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BASIS OF PRESENTATION
The Co-operative Bank Holdings p.l.c. is the
immediate parent company of The Co-operative Bank Finance p.l.c.
and the ultimate parent company of The Co-operative Bank p.l.c. In
the following pages the term 'Group' refers to The Co-operative
Bank Holdings p.l.c. and its subsidiaries. The term 'Finance Group'
refers to The Co-operative Bank Finance p.l.c. and its
subsidiaries. The term 'Bank' refers to The Co-operative Bank
p.l.c. and its subsidiaries which are consolidated within the
Finance Group and then ultimately the Group.
Underlying
basis: The statutory results are adjusted to
remove certain items that do not promote an understanding of
historical or future trends of earnings or cash flows, which
therefore allows a more meaningful comparison of the Group's
underlying performance.
Alternative
performance measures: The Group uses a number
of alternative performance measures, including underlying profit or
loss, in the discussion of its business performance and financial
position.
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Investor enquiries:
investorrelations@co-operativebank.co.uk
Angela Catlin, Head of Investor Relations, Corporate Affairs and
Brand: +44 (0) 7548 965 042
Media enquiries:
Email:
pressoffice@co-operativebank.co.uk
Telephone: +44 (0) 151 271
1985
The person responsible for arranging
the release of this announcement on behalf of The Co-operative Bank
Holdings p.l.c. and The Co-operative Bank p.l.c. is Catherine
Green, Company Secretary.
About The Co-operative Bank
The Co-operative Bank p.l.c. provides a range
of banking products and services to about 2.4m retail customers and
c.96k small and medium sized enterprises (SME). The Bank is
committed to values and ethics in line with the principles of the
co-operative movement. The Co-operative Bank p.l.c. is the only UK
bank with a customer-led Ethical Policy, which gives customers a
say in how their money is used. Launched in 1992, the policy has
been updated on six occasions, with new commitments added in June
2022 to cover what we do for our planet, people and the
community.
The Co-operative Bank p.l.c. is authorised by
the Prudential Regulation Authority (PRA) and regulated by the
Financial Conduct Authority (FCA) and the Prudential Regulation
Authority. The Co-operative Bank p.l.c. eligible customers are
protected by the Financial Services Compensation Scheme (FSCS) in
the UK, in accordance with its terms.
Note: This announcement
contains inside information.
The Co-operative Bank p.l.c. LEI:
213800TLZ6PCLYPSR448
The Co-operative Bank Finance p.l.c. LEI:
213800KNE8ER4N9BLF11
The Co-operative Bank Holdings p.l.c. LEI:
213800MY2BSP459O8A22
FORWARD-LOOKING
STATEMENTS
This document contains certain forward-looking
statements with respect to the business, strategy and plans of the
Group and its current targets, goals and expectations relating to
its future financial condition and performance, developments and/or
prospects. Forward-looking statements sometimes can be identified
by the use of words such as 'may', 'will', 'seek', 'continue',
'aim', 'anticipate', 'target', 'projected', 'expect', 'estimate',
'intend', 'plan', 'goal', 'believe', 'achieve', 'predict', 'should'
or in each case, by their negative or other variations or
comparable terminology, or by discussion of strategy, plans,
objectives, goals, future events or intentions.
Examples of such forward-looking statements
include, without limitation, statements regarding the future
financial position of the Group and its commitment to its plan and
other statements that are not historical facts, including
statements about the Group or its Directors' and/or management's
beliefs and expectations. Any such forward-looking statements are
not a reliable indicator of future performance, as they may involve
significant stated or implied assumptions and subjective
judgements, which may or may not prove to be correct. There can be
no assurance that any of the matters set out in forward-looking
statements are attainable, will actually occur, will be realised,
or are complete or accurate. Past performance is not necessarily
indicative of future results. Differences between past performance
and actual results may be material and adverse.
For these reasons, recipients should not place
reliance on, and are cautioned about relying on, forward-looking
statements as actual achievements, financial condition, results or
performance measures could differ materially from those contained
in the forward-looking statement. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and
contingencies because they are based on current plans, estimates,
targets, projections, views and assumptions and are subject to
inherent risks, uncertainties and other factors both external and
internal relating to the Group's plan, strategy or operations, many
of which are beyond the control of the Group, which may result in
it not being able to achieve the current targets, predictions,
expectations and other anticipated outcomes expressed or implied by
these forward-looking statements. In addition, certain of these
disclosures are dependent on choices relying on key model
characteristics and assumptions and are subject to various
limitations, including assumptions and estimates made by
management. No representations or warranties, expressed or implied,
are given by or on behalf of the Group as to the achievement or
reasonableness of any projections, estimates, forecasts, targets,
prospects or returns contained herein. Accordingly, undue reliance
should not be placed on forward-looking statements.
Any forward-looking statements made in this
document speak only as of the date of this document and it should
not be assumed that these statements have been or will be revised
or updated in the light of new information or future events and
circumstances arising after today. The Group expressly disclaims
any obligation or undertaking to provide or release publicly any
updates or revisions to any forward-looking statements contained in
this document as a result of new information or to reflect any
change in the expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based, except as required under applicable law or
regulation.
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