PPI claims help keep Co-op Bank in the red

What will the final PPI payout be?

The on-going cost of compensation for mis-selling PPI policies has helped keep the Co-op Bank in the red, according to its annual report.

⚠️ With the PPI Deadline less than a year away, now would be the perfect time to check!

It set aside an additional £39.5 million in 2018 to make its overall provision £537.8 million and it believes the new amount will be enough to pay any future successful claims up to the PPI claims deadline in August.

Uphold rates

Average uphold rates for the additional 24,000 complaints it expects to receive it believes will rise to 72% with average compensation per claim of £2,256.

Losses before tax increased to £140.7 million with the bank blaming a tough trading environment and the cost of a major IT project.

Struggling

The bank has been struggling to turn around its performance since being rescued from total collapse in 2017 by a consortium of American hedge funds who were already investors.

The problem originally started in 2013 when a plan to buy the newly created TSB branches from Lloyds had to be scrapped when a £1.5 billion hole was found in the Co-op’s balance sheet.

Bailed out

Facing collapse, it was bailed out by the consortium, leaving the Co-operative Group parent company with a 20% stake.

However, the problems continued to rise and the bank had to be rescued by a further injection of £700 million from the hedge funds, reducing the Co-op Group’s stake to just 1%.

Denying rising speculation that the problems might be solved with a sale, chief executive Andrew Bester said the bank was committed to ‘a multi-year transformation’

Strongly profitable

He said: “We’ve done a five-year plan and we’re working towards getting the business into a strongly profitable position by 2023.”

One of the problems has been the difficulty in splitting itself off from the IT systems operated by the Co-operative Group, but Mr Bester said that project was due for completion this year.

Operating profit

The report said when one-off costs were stripped out, the bank had achieved an operating profit of £14.7 million as opposed to an operating loss of £84 million in 2017.

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Why should I make a PPI claim?

With just six months to go before the PPI deadline on August 29th, millions of potential claims remain to be made with banks setting aside billions of pounds to cover potential pay-outs.

Why should I make a PPI claim?

With just six months to go before the PPI deadline on August 29th, millions of potential claims remain to be made with banks setting aside billions of pounds to cover potential pay-outs.

Are we doomed by paying with cash?

A hard-hitting new report is demanding that government step in with measures to save our doomed cash system.

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