Co-op Bank has said economic uncertainty following the UK’s Brexit vote may hamper growth. It termed market conditions as “challenging” for retail banks.
The bank reported a narrowing of half-yearly losses to £177m but said “legacy issues” would continue to hit its financial performance until it has finished a rescue plan.
The bank almost collapsed in 2013, after bad property loans contributed to a £1.5bn hole in its finances.
Chief executive Niall Booker said, “Today’s market conditions are challenging for all retail-focused banks and the macroeconomic uncertainty following the result of the EU referendum, including the likelihood of lower-for-longer interest rates, may restrict our ability to grow revenue in the short term”.
Co-op Bank said the vote could also lead to a contraction in the UK property market, affecting mortgage loan growth.
It added that reductions in income could force it to reduce costs and spending on projects, while higher unemployment and lower property prices could make it harder for the bank to recover the full value of some of its loans.
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