Co-op Bank profits surge in 2022
By Josh White
Date: Wednesday 01 Mar 2023
(Sharecast News) - The Co-operative Bank reported a full-year profit before tax of £132.6m and underlying profit of £136.0m in its 2022 results on Wednesday.
That represented an increase of £101.5m and £95.0m, respectively, compared to its 2021 performance.
The privately-held bank, which has its debt securities traded on the London Stock Exchange, said its low cost funding model on a secured balance sheet contributed to a low level of arrears across its high-quality mortgage portfolio.
Additionally, the de-risking of the Pace pension scheme was completed in the year, with the Pace Trustee buying the bank's section in a full "buy-in."
Co-op Bank said its strong capital underpinned its financial performance, providing a "significant" opportunity for capital optimisation.
Furthermore, it noted its recognition in the environment, social and governance (ESG) space, winning the 'most ethical Bank UK 2022' award by Capital Finance International (CFI), as well as receiving "market-leading" Sustainalytics ratings.
The bank said it had delivered on its 2022 commitments, with positive momentum moving into 2023.
"I am extremely proud of what we have achieved during our 150th year," said chief executive officer Nick Slape.
"The bank has not only delivered a significant improvement in profitability, but has also achieved several notable milestones, such as the successful issuance of £250m of senior unsecured debt in March, full compliance with its capital requirements including all buffers one year ahead of plan, and the de-risking of the Pace defined benefit pension scheme.
"Our IT simplification programme is progressing well with the successful launch of two new savings products, with the final one due to launch in the first quarter, which will complete the re-platforming of the savings books."
Slape said the company was now planning to "fully in-house" its mortgage servicing capabilities by the first quarter of this year.
"While the macroeconomic environment remains challenging, we continue to work hard to ensure that both our customers and colleagues feel supported.
"Looking to the future, we are focussed on delivering both growth and attractive, sustainable returns for our shareholders.
"Our capital position gives us the scope for optimisation as well as continued investment in our group and returns of capital to shareholders."
Reporting by Josh White for Sharecast.com.
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