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'Deep rooted' banking troubles push Co-op into £559m loss
by Sarah Miloudi on Aug 29, 2013 at 07:28
The Co-operative Group has slumped to a first-half loss of £559 million, sending its shares down more than 1%.
Its troubled banking division held the group back, though City regulators said the Co-op's losses for the first six months of the year had been anticipated and did not alter its assessment of its capital position.
Earlier this year, the Co-op struck a deal with the Prudential Regulation Authority (PRA) to address its capital shortfall by raising £1 billion over the course of this year, followed by £0.5 billion over the 12 months that followed.
'The PRA will continue to monitor the actions taken by the Co-operative Bank as part of its plan to meet that capital shortfall. It will hold the Co-operative Bank to its plans, and if they fall short of what is required, it will ask for additional action,' the PRA said in a statement this morning.
However investors were not reassured by the PRA's comments and shares in Co-operative Group had dropped by 1.15% shortly before 10.30am, taking them down to 47.20p.
Co-operative banking chief executive Niall Booker said acknowledged the difficulties the group's banking division was facing, particularly in light of the bad loans totalling in excess of £400 million that it had been forced to writedown.
Booker said: 'We recognise the disappointment all stakeholders must feel about the financial performance we are reporting.
'This in turn reflects the deep rooted problems that the bank faces.'
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