Co-operative Bank eyes acquisitions as profits top £103m
The Co-operative Bank said it was eyeing up potential acquisitions today after it posted a 75 per cent surge in pre-tax profit to £103.1m in the first nine months of the year.
The high street lender said profits had more than tripled from £29m on the same period last year as it became the latest lender to report a boost to its balance sheet from rising interest rates. Total income at the bank jumped more than 40 per cent to £363m in the period.
Boss Nick Slape said the lender had “delivered significant business momentum” in the first nine months and it would now ramp up its investment in the business.
“This will centre on improving customer experience, upgrading our branch network, and increased funding of our external campaign, giving the Bank a louder voice on matters that mean the most to our customers,” he said.
Slape added that the lender is now eyeing up potential acquisitions and was “already in the space where we can go and acquire a prime mortgage book”, in comments reported by the Financial Times.
The Co-op chief indicated the bank may have another tilt at TSB after two failed takeover swoops in the past, with the latest £1.1bn bid rejected by TSB’s owner Banco Sabadell last year.
It came as the bank ramped up its provisions for loans, with £1.3m set aside – up from £300,000 last year. But bosses said its balance sheet faced no particular threat from loan defaults and its balance sheet was low risk.
The bank has increased the guidance for its CET1 ratio – which determines its ability to face financial distress – to 20.5 per cent following “better than expected income and lower risk-weighted assets”.
Adjusted return on tangible equity also went up to around 14.5 per cent, as higher profitability and improved performance drove shareholder value.