The Co-operative Bank is not where it needs to be yet, but it is getting there, chief executive Niall Booker has said.
The Co-operative Bank is on its way to recovery and is in a stronger position than it was a year ago, its chief executive has said.
Niall Booker said that the bank has seen a great deal of progress since its troubles of recent years, even though it would currently still struggle to meet the Bank of England stress tests.
He stated that particular piece of news would “come as no surprise”, noting: "Almost 70 per cent of our customer assets are residential mortgages and it has always been clear to ourselves and the regulator that we are vulnerable to these tests at this point in our turnaround.”
However, Mr Booker announced, that turnaround is in progress and this has included the raising of more than £1.9 billion of capital. It may not be required to raise more in the short term as it is working to an agreement with the Bank of England over a five-year recovery plan.
The chief executive stated that the bank is likely to start making a profit again in 2016 as it continues to rationalise its branch network and staffing levels.
However, beyond that the bank may find itself in a considerably healthier state, not just in terms of meeting the stress test, but in its subsequent capacity to gain new business, expand its services and take on more staff.
Financial sector workers may find they have a lot of opportunities as the bank continues its long-term process of developing non-branch services. This has been going on since the 1990s, when it followed the opening of one call centre in Skelmersdale with a second in Stockport. The latter base also housed its internet-only bank Smile.
Regular stress-testing of UK banks was introduced by the Bank of England last year, on the recommendations of the Financial Policy Committee.
The aim is to ensure not that each and every bank is in perfect health all the time, but to reduce the chances of a systemic failure when several institutions are vulnerable to a financial sector shock, as was the case in 2008.