By Charlie Conchie
Co-operative Bank has doubled down on its guidance for the year today despite a dip in profits, in a key set of results for the lender as it hunts for a potential buyer.
The bank notched pre-tax profits of £81.1m in the nine months to the end of September, down from £103.1m in the same period a year ago, despite a boost from rising interest rates which pushed up its its net interest income by ten per cent £363.4m.
The update marks the first for Co-op Bank since it reportedly launched a formal sale process in September after months of rumours of reported interest from rival retail lenders.
Private equity backed bank Shawbrook reportedly launched a formal bid for the firm last month. Specialist lender Aldermore had been linked with a potential takeover for months but is said to have shelved a bid late last month.
A bidding process for the firm has been closely watched in the industry as one of the first deals in a predicted wave of consolidation among Britain’s mid size high street lender. Smaller banks have been hit by an economic downturn and a crisis that shook the sector after the collapse of Silicon Valley Bank earlier this year.
Bosses have reportedly rebuffed interest from investors for a sale and are said to favour to a merger with a rival high street lender.
Co-op did not comment on the sale process in its market update today.
In a statement, boss Nick Slape said the firm had been buoyed by its acquisition of Sainsbury’s mortgage portfolio in the first nine months of the year, which had boosted its customer base by 3,500 and added £500m to its balances.
“We have strong levels of capital and liquidity, with full year guidance unchanged across all key indicators,” he added.
He added that the firm had “robust customer credit quality” with borrowers in arrears remaining low despite tricky economic conditions that have hit borrowers.
