UK-based Co-op Bank's 2020 loss narrows amid lower operating expenses

Co-operative Bank PLC's full-year 2020 consolidated aftertax loss narrowed year over year to £95.7 million from £153.0 million amid lower operating expenses, and the bank said it anticipates a return to profitability in 2021.

Total operating expenses came in at £397.4 million, compared to £541.2 million in 2019. The bank booked an operating income of £315.3 million in 2020, compared to £386.6 million in 2019.

The British lender also said a part of its executive pay will be linked to ESG targets from 2022 onward.

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Net interest income for the year came in at £266.9 million, compared to £310.0 million in 2019. Meanwhile, net fee and commission income were £23.5 million, up on a yearly basis from £20.7 million.

Losses on net credit impairments amounted to £21.6 million, compared to gains of £2.5 million a year ago.

As of December 2020-end, Co-op Bank's common equity Tier 1 ratio stood at 19.2%, compared to 19.6% at the end of December 2019. For 2021, the bank aims for a CET1 ratio in the range of 16% to 17% and a cost-to-income ratio in the range of 85% to 95%.

The total capital ratio was 23.7% at 2020-end, compared to 23.8% at the end of 2019.

The bank successfully issued £200 million qualifying debt for the minimum requirement for own funds and eligible liabilities, or MREL, in the fourth quarter of 2020 as part of efforts to achieve its MREL obligations by January 2022.