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Co-op Bank takes 700 mln stg hit on bad loans, IT woes
August 29, 2013 / 6:21 AM / 4 years ago

Co-op Bank takes 700 mln stg hit on bad loans, IT woes

LONDON, Aug 29 (Reuters) - Britain’s Co-operative Group took a 700 million pound hit on losses for bad loans, technology problems and customer compensation as it came clean on the troubles in its banking arm as part of its plan to plug a 1.5 billion pound hole there.

Co-operative Bank said on Thursday it made a pretax loss of 709 million pounds in the six months to the end of June, after losing 496 million pounds on the impairments on loans, writing down its IT systems by another 148 million pounds and setting aside another 61 million pounds for compensating customers, including for mis-sold insurance products.

The Co-operative Group, which is owned by its customers, has come up with a three-pronged plan to fill a capital shortfall identified by regulators at its bank. The parent group will provide 1 billion pounds - half from disposals and restructuring and half from bank loans - and 500 million is due to come from writing down the value of its bonds.

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