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 for 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 end of last year.
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 in the third quarter.
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 during the three months 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.