PROFITS UP AT CFS

CO-OPERATIVE Financial Services (CFS) has announced a seven per cent per cent increase in operating profits and a rise of 3.8 per cent in pre-tax profits for its...

CO-OPERATIVE Financial Services (CFS) has announced a seven per cent per cent increase in operating profits and a rise of 3.8 per cent in pre-tax profits for its insurance and banking operations.

The CFS operating profit before significant items was &#163 166.4m compared with &#163 155.8m in 2004. This includes &#163 66.5m from general insurance (2004: &#163 42.5m) and &#163 97.8m from banking activities (2004: &#163 114.3m).

Pre-tax profit was &#163 135.7m (2004: &#163 130.7m) including &#163 96.5m (2004: &#163 114.3m) from banking and &#163 37.1m (2004: &#163 17.4m) from general insurance.

Other financial highlights include:

o General insurance claims ratio reduced to 76 per cent (2004: 86 per cent)
o The banking cost/income ratio was reduced by 0.8 per cent from 63.3 to 62.5
o Total assets grew to &#163 38.6 billion (2004: &#163 36.8 billion)
o Net income from banking activities increased by &#163 21.7 m (4 per cent) but bad debt increased to &#163 99.8m (2004: &#163 70.7m)

The modernisation of CFS&#039 insurance business CIS, which was announced in July 2004, is in advance of expectations in delivering benefits ahead of both budget and schedule. Actions taken to date have achieved annualised savings in expenses, commissions and claims incurred of over &#163 102m.

During the year, CFS was re-organised with a view to becoming a single, customer-focused organisation supporting its seven million customers with an aspirational vision to become the UK&#039s most admired financial services business.

CFS Chief Executive David Anderson commented: "This is the first time that CFS has presented an integrated result for its insurance and banking businesses and I believe it emphasises the strength and balance of our operations. It is particularly satisfying that after a year of very substantial change, CIS has exceeded our own targets and delivered significant financial and customer service benefits."

*Further details in the next edition of Co-operative News available April 18th.

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