Co-op Bank conduct and legal risk costs nearly double to £193.7m
Bank chalks up £193.7m of conduct and risk costs as it announces £610.6m pre-tax loss
April 01, 2016 at 07:01 AM
2 minute read
Co-op Bank has revealed a near doubling of its conduct and legal risk costs, from £101.2m in 2014 to £193.7m in 2015.
The bank's increased conduct and legal risk costs came as the bank announced an increase in its pre-tax loss from £264.2m in 2014 to £610.6m in 2015.
In its annual report the bank attributed the increase to legacy issues that have "continued to be recognised across the industry".
Its major legal risk costs in 2015 included £58.3m of wrongly charged interest that it had to give back to consumers and a further £40.4m to administer the refunds.
The amount the bank set aside for payment protection insurance (PPI) redress to customers also increased from £5m in 2014 to £44.2m in 2015. I also said it had spent £27.6m to administer the refunds in 2015, when it spent nothing the year before.
Co-op bank set up its inaugural legal panel in 2015, the first since it split with its parent Co-operative Group in 2013.
Firm's on the panel are Clifford Chance, Allen & Overy, Berwin Leighton Paisner, Mishcon de Reya, Bates Wells Braithwaite, Hogan Lovells, Pinsent Masons, TLT, Eversheds, DLA Piper and Matthew Arnold Baldwin which has since dissolved, with its banking and litigation team joining Dentons.
Clifford Chance acted for the bank in August 2015 as it escaped a fine by regulators the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), which took into account the bank's financial position and chose to public censure it instead.
The bank was found to have breached its listing rules by publishing misleading information about its capital position.
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