CO-OPERATIVE Financial Services has announced annual results for the Co-operative Bank and the Co-operative Insurance Society (CIS).
The bank's pre-tax profit of £ 132.0 million was £ 1.9 million higher than 2003 ? the eleventh consecutive year of record profits while CIS's life, pensions and unit trust new business (measured on an annualised premium equivalent basis) was £ 153.66 million ? up seven per cent.
However, CIS's general insurance business profits before tax (excluding exceptional items, short-term investment fluctuations and premium discount reserve adjustment) were down to £ 13.1 million compared to a figure of £ 20.9 million in 2003.
At the Co-op Bank, average retail customer lending balances grew by 41 per cent and average retail customer deposit balances by seven per cent.
Despite the large increase in lending, provisions for bad and doubtful debts stood at 0.82 percent of year-end loans and advances, which was 0.21 percentage points lower than in 2003.
Total premium income across CIS fell to £ 1,454m from £ 1,784m, however income from sales of unit trusts rose to £ 335m from £ 187m in 2003. The amount of money managed on behalf of investors increased to £ 20.3bn. The life and savings business recorded a transfer to the Fund for Future Appropriations of £ 625m, compared with £ 322m during 2003.
Paul Hewitt, Acting Chief Executive of CFS, said: "We have developed robust plans to ensure that our long-term strategy of satisfying our customers' wider financial needs in a distinctive co-operative manner will be delivered.
"The Co-operative Bank results continue to demonstrate strength in our brand and the values that underpin it, including our strong focus on customer service. We will make substantial new investment in the bank to ensure that growth in new customer relationships provide for continued success in the future
"At CIS, our extensive modernisation programme will ensure a successful future for the insurance operations, and a foundation for further integration of our businesses in the future"
CFS say that, during 2004, the decision to embark on an extensive programme of modernising CIS meant the further integration of CIS and the Co-operative Bank was put on hold. The modernisation programme is now well underway, and CFS will resume the focus on integration during 2006 and beyond.
The Co-operative Bank and CIS General Insurance profits are consolidated into the Co-operative Group's accounts whilst CIS long-term business remains mutual with profits being retained within the fund.