Co-op bank shines in the beleaguered banking world after profit announcement
The Co-operative Bank has increased profits by 70 percent (for the year to 10 January) as depositors fled to what has always been seen as the “boring bank” but in troubled times, many savers have warmed to its security.
In a period where its competitors struggled, retail deposits increased by 17 percent whilst corporate deposits rose 27 percent.
Lending was also on the up with mortgage and corporate lending rose by a quarter to £12.2bn.
Chief Executive, David Anderson, has said that the bank has remained cautious in the lending growth and still has 6 percent more deposits than loans and it is this prudent business model that has meant the “boring bank” operates on a lower risk with less exposure to money markets.
Despite the recession, bad debts have fallen to £96m from £102m.
Its banking operation saw the surplus increase by £85.6m for the 12 months to 10 January as savers reached for security after Northern Rock and the Bradford & Bingley collapse.
The group’s overall pre-tax profits fell to £147m compared to £155.4m in 2007 but that has been due to the unavoidable fall in the value of investments held by both the bank and the insurance sectors but given the current climate, the company still posted a healthy profit.