MANCHESTER (CU)_Over the past few weeks, some of the major financial service providers in the United Kingdom have reported a sharp increase in their profits, as the booming mortgage market, together with the ongoing economic recovery from the pandemic, made it less likely that COVID-hit borrowers would default on loans. During the third quarter of this year, Lloyds Banking Group saw its profits double on the back of increased demand for larger homes linked to the pandemic, while NatWest Group tripled its profits during this period, despite being forced to set funds aside to cover fines linked to money-laundering charges.
Accordingly, on Friday (5 November), the chief executive of the Co-operative Bank revealed that the Manchester-based high-street bank is set to mark a “turning point” this year, as the bank heads for its first annual profit in a decade. During the nine months which ended on 30 September, the UK lender reported a pre-tax profits of £28.5 million, having bounced back from a £68 million loss during the same period last year.
With a 3.3 million customer base across 50 branches in the UK, the bank has benefited from the surge in mortgage lending amid the global health crisis, just as it was the case with its fellow competitors. A temporary stamp duty holiday fuelled the home loan market in the European nation during COVID and Co-op Bank’s mortgage lending in the third quarter totalled £1.1 billion.
Cheering the results, which signal a major turnaround by the bank, chief executive Nick Slape noted that the British lender was finally putting its legacy issues to rest. According to him, 2021 was turning out to be “the turning point year for the bank”, which has failed to report an organic profit on its own over the past 10 years. Since 2011, the Co-operative Bank has been struggling to return to profit after a £1.5 billion capital gap was discovered in 2009, following the disastrous acquisition of the Britannia building society.
