The Co-operative Bank has reported record interim pre-tax profits for the tenth consecutive year, showing the financial sector that ethics coupled with high standards of service is a powerful formula for sustainable success.
Pre-tax profits for the first half of 2003 were £ 75.3m, up 10 per cent on 2002. This increase arose from a four per cent rise in operating income and a 14 per cent reduction in the charge for bad debts. Operating costs were up six per cent as the bank continued to invest in new business areas and expansion.
Retail deposits grew by 13 per cent and lending by 20 per cent, which includes strong growth at the bank's internet-arm smile.
In June 2003, the bank acquired Northern Rock's credit card business. The acquisition resulted in Northern Rock transferring its existing credit card portfolio of 90,000 accounts to the bank, which will also be able to offer new credit cards to Northern Rock's customer base.
The Co-operative Bank's reputation for ethical banking and Corporate Social Responsibility continues to build. In July 2003 the bank won the prestigious Business in the Community Cause Related Marketing award.
Following the formation of Co-operative Financial Services (CFS) in April 2002, work to bring the bank and the Co-operative Insurance Society (CIS) together under common leadership continues apace. Mervyn Pedelty, CFS Chief Executive, has spent the past months putting an organisational structure together for the new combined operation, which has assets of more than £ 30bn and employs some 14,000 staff.
With a new CFS Board in place, and an Executive Team made up of senior managers from both the bank and CIS, coupled with some key outside appointments, CFS is now on course to achieve the objective of ensuring that all seven million customers are offered a much broader range of Co-operative financial services than they could previously receive from either the bank or CIS operating independently.
Mr Pedelty, who is also Chief Executive of CIS and remains Chief Executive of The Co-operative Bank, said: "To achieve ten successive years of record results is impressive by any standard and everyone associated with The Co-operative Bank should be exceptionally proud of this achievement.
"With the formation of CFS we stand on the brink of an exciting new era. It is important that we harness the strengths, traditions and values of both CIS and The Co-operative Bank in order to offer customers a broader range of products and an even more convenient service.`