Co-op Bank unveils £90m dividend ahead of Coventry sale
The Co-operative Bank is to pay out £90m to investors after reporting lending growth in the third quarter, ahead of a £780m tie-up with Coventry Building Society.
The bank said on Tuesday that its net mortgage balances rose two per cent between July and September compared to the same period a year earlier.
Meanwhile, its net lending to small and medium-sized businesses jumped 16 per cent as the UK economy showed signs of improvement.
Its trading update comes as Co-op Bank prepares to return to mutual ownership in the first quarter of 2025. Coventry’s acquisition of the 152-year-old lender, agreed in May, followed Nationwide’s £2.9bn acquisition of Virgin Money, which completed at the start of October.
Co-op Bank’s customer deposits grew by one per cent during the three months.
Its board has approved an interim dividend of 0.99p per Class A share to reward investors. The bank said the dividend, to be paid on 28 November, would return £90m to shareholders.
Nick Slape, Co-op Bank’s chief executive, said the lender’s shareholders had “patiently supported the bank in its turnaround” and that the dividend “following the continued profitability and successful normalisation of capital requirements”.
Co-op Bank also touted the fact that net switching away from its current account offering was around 70 per cent lower than a year earlier.
It added that it was on track to end 2024 with a net positive switch position “for the first time in several years following our proposition success”.
“The bank is in a strong position, maintaining a resilient, low risk balance sheet and sustained credit quality,” Slape added.