Co-operative Bank considers 'strategic opportunities' following turnaround process

The Co-op stressed there was “no guarantee that such discussions will result in any eventual transaction”.

It comes after it was reported that a number of possible suitors were looking at making a bid for the Co-op Bank, which is said to have at one stage included specialist lenders Shawbrook, Aldermore and Paragon Banking Group.

But it was reported last month that while Aldermore had mooted a tie-up with Co-op Bank, it had since ditched the plans.

The Co-op Bank, which has about 2.5 million retail customers and says it is the UK’s leading ethical bank, agreed a £464m deal in August to buy Sainsbury’s Bank’s mortgage portfolio, adding around 3,500 customers with balances of around £479m.

Under chief executive Nick Slape, the Co-op Bank has been leading an accelerated turnaround on its path to recovery after being rescued by a group of hedge funds in 2017.

The once-flailing bank became profitable two years ago and more than quadrupled profits in 2022, although its latest update showed a steep drop in quarterly pre-tax profits, down 21 per cent to £81.1m.

On an underlying basis, profits fell 5 per cent to £97.9m.

The group’s net interest income – the difference between what a bank charges for loans and pays for savings – lifted 10 per cent to £395.2m as it was boosted by higher interest rates.

Mr Slape said the recent Sainsbury’s mortgage deal was the group’s “first portfolio acquisition in more than a decade, and highlights the bank’s turnaround and focus on both organic and inorganic opportunities”.

He said: “Our mortgage and savings transformation programme continues at pace with mortgage originations now live on a new re-branded platform, The Co-operative Bank for intermediaries, as we start to see the benefits of our accelerated investment.”