Co-op Bank will pay investors a £90m dividend as it prepares for cross-ownership
- Lender will merge with Coventry Building Society early next year
Co-operative Bank has prepared a £90m dividend payout to investors ahead of the looming return to cross-ownership.
The lender, which will merge with Coventry Building Society early next year in a £780m deal, told investors on Tuesday that trading conditions in the third quarter were ‘robust’.
Co-op highlighted an upturn in customer deposits and wholesale market activity, with the bank boasting a ‘significant surplus of all capital and liquidity needs’.
Boss Nick Slape said Co-Op was focused on delivering value to shareholders, who have “patiently supported the bank in its turnaround”.
Co-op announced plans to cut 400 jobs in March as it seeks to “simplify and transform the business”.
The Co-op board has recommended a dividend of just under 1 pence per ordinary A share for the year to December 31, well ahead of the 2023 annual dividend of 0.13 pence and a payout of £90 million to investors in total .
The lender will merge with Coventry Building Society in the first quarter of 2025
Slape said net mortgage balances are up 2 percent this year, while net business lending to SMEs is up 16 percent.
Meanwhile, overall customer deposits are up 1 percent and Co-Op has seen around 70 percent fewer current account changes.
The bank has also performed well in the wholesale market with a new issue of £500 million of three-year covered bonds and the successful early refinancing of £200 million of other commitments ‘both of which are attracting very strong investor demand’, Slape said.
He added: “We have been focused on delivering shareholder value.
“Our shareholders have patiently supported the bank in its turnaround and, following continued profitability and the successful normalization of capital requirements, I am pleased that the board has been able to pay an interim dividend that delivers value ahead of the expected completion of the sale of the bank. bank to Coventry Building Society in the first quarter of 2025.
“The bank is in a strong position, maintaining a resilient, low-risk balance sheet and sustainable credit quality.”
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