Ethics pay off for Co-op Bank

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The Independent Online
The Co-Operative Bank's ethical banking campaign has helped attract customers, increasing its retail deposits against the national trend, according to the results published yesterday, writes Peter Rodgers.

The bank will not accept accounts linked to organisations involved in activities such as testing products on animals or fox hunting.

But although pre-tax profits rose sharply to pounds 3.5m in the half year to June from pounds 700,000 a year earlier, the bank still made a bottom-line loss because of the high cost of paying dividends on its preference shares.

The loss after tax and preference dividends was pounds 500,000 in the half year, compared with a loss of pounds 2.2m a year earlier and pounds 7.2m in the whole of the last full year. Preference dividends cost pounds 2.8m in the first half.

The bank's bottom-line losses over the last two and a half years now total pounds 18.1m.

But a spokesman said the bank's shareholders in the co-operative movement were determined that it should pursue an increase in business.

The 'free for life' Visa gold card has been successful, attracting 130,000 cardholders in less than a year. The bank said it had no plans to increase charges for personal customers.

Bad debts were lower than in the second half of last year, and provisions will continue at a 'substantial level' in the second half.