LONDON: Britain's Co-operative Bank will close 57 more branches this year and more in the future under a turnaround plan that saw it cut 15 percent of its staff last year and make a loss of 264 million pounds ($392 million).
Co-op Bank is trying to recover from a near collapse in 2013, when it was hit by a yawning hole in its finances, a drugs scandal, an exodus of top executives, and posted a 633 million pound loss.
The crisis saw bondholders take control of the bank, with its long-time owner -- the mutually-owned Co-operative Group -- relegated to a minority holding.
The bank said on Friday Chief Executive Niall Booker, who took over in 2013, would remain as CEO until the end of 2016.
Booker was paid 3.1 million pounds last year and could take home about 4.5 million pounds a year under a new pay plan.
The bank said it closed 72 branches last year and planned to reduce its network by 57 more this year. That will reduce the network to 165 branches, down 44 percent over two years, and Booker warned there were likely to be more closures and job cuts to come.
"Over time it seems likely the branch network will reduce in line with customers' increased use of digital channels," he told reporters on a conference call.
The bank's staff numbers fell to 5,711 last year from 6,704 a year earlier.
Co-op Bank said it planned to speed up the sale of unwanted assets, mainly through selling a portfolio of residential mortgages called "Optimum".
Co-op Bank was the only UK lender to fail a "stress test" of major firms by Britain's financial watchdog last year.
Its common equity Tier 1 ratio was 13 percent at the end of last year, although it has said it expects to be loss-making for another two years so that ratio will fall before it improves.
Charges for misconduct and legal related issues, including the mis-selling of insurance products, were 101.2 million pounds last year, from 411.5 million in 2013.
Comments
Comments are closed.