The Co-operative Bank has today announced proposals to make approximately 200 roles redundant by the end of March 2017, as it seeks to reduce its operating costs given the impact of a prolonged lower for longer interest rate environment.
As outlined in the Bank’s interim results and recent Q3 trading statement, the low interest rate environment limits the ability of all banks to generate income and presents further cost challenges. Whilst reducing people costs, which form a significant portion of the overall cost base, has always been a key part of the turnaround plan, the economic environment has meant the Bank needs to cut costs further.
A large number of the proposed roles impacted are management and head office roles, primarily based in Manchester and Stockport and are focused on areas where processes can be simplified and streamlined further as the Bank restructures the business into a simpler bank. There are no branch closures as part of the announcement today. The Bank spoke to colleagues earlier today and will continue to consult with colleagues and trade unions on the proposed changes over the coming weeks.
Deputy Chief Executive Liam Coleman said:
“Decisions such as these are never easy, but these cost reductions are critical to progressing our turnaround and delivering a cost base which supports a sustainable Core Bank. Regrettably, this means we have today briefed colleagues on our proposals to make around 200 roles redundant. Over the coming weeks we will continue to consult with colleagues and trade unions on these proposals and our focus will be to ensure that all impacted colleagues are treated sensitively and respectfully."
“We have made progress in turning the Bank around since 2013 but have always been clear that the Bank’s recovery is a difficult journey. As we have said before, we will remain loss making in 2016 and 2017 and whilst we continue to make progress with our turnaround plan, in a challenging economic environment, maintaining our focus on costs and delivery of initiatives are key to building a more resilient and sustainable bank. As such, it is important that we take the necessary steps to continue to progress our turnaround. ”