Co-operative Bank returns to profit

The Co-operative Bank has recorded its first full-year profit in a decade, after a “milestone year” for the ethical lender.

The bank has also announced that it will be paying bankers bonuses of £13.3 million for the 2021 financial year, treble the bonus that was paid out the previous year.

Large payouts defended

The bank’s chief executive, Nick Slape, has defended the increased bonus payouts, called them “completely appropriate” after a year which sat the bank’s pre-tax profit rise to £31 million, a significant improvement from the £104 million losses in 2020. The last time that the bank recorded an annual profit was in 2011, when it made £54 million.

The total income of the bank also rose from £307.3 million to £361.5 million from 2020 to 2021.

There’s been a huge amount of effort 24/7 to make this happen, so I think [the bonus pay-outs are] appropriate… The bar has been set for 2022, and if we don’t deliver…then that won’t be the sort of number you see [next year].

Nick Slape, Co-operative chief executive

Slape himself received a bonus worth almost £1.2 million, effectively doubling his salary for 2021.

2021 successes

The bank has seen a number of improvements that have led to the return to profit. Two of the primary drivers have been an increase in mortgage applications and an effective cost-cutting strategy. The bank has also been able to recoup some of the money set aside to cushion the blow of the Coronavirus pandemic, as have many other banks.

The Co-operative bank has been struggling financially for a long time, with the major problems coming to light in 2013, when a massive £1.5 billion gap in the bank’s finances was discovered, linked to the takeover of the Britannia building society in 2009. The bank only survived due to being rescued by a group of hedge funds that now control the bank.

The bank’s reputation was further harmed when former chairman Paul Flowers, also a former Labour councillor and Methodist church minister, pleaded guilty to possession of various hard drugs in 2014.

Current CEO Slape, the sixth person in charge of the bank within the last nine years, has stated that he predicts the bank will report a higher profit for 2022, the bank’s 150^th anniversary year.

Our return to profitability and balance sheet growth at improved margins gives us a strong platform for further growth in the years ahead.

Nick Slape, Co-operative chief executive