Co-op Bank to return £90m to shareholders ahead of merger

In its trading update for Q3, Co-operative Bank said this would be paid to shareholders on 28 November. 

The merger transaction is set to be completed in the first quarter of 2025 following the £780m purchase of the bank by the building society. 

This will create a group with a balance sheet of £89bn, as of 31 December 2023. 

Nick Slape, chief executive of Co-operative Bank, said: “We have focused on delivering shareholder value; our shareholders have patiently supported the bank in its turnaround and, following the continued profitability and successful normalisation of capital requirements, I am delighted that the board was able to declare an interim dividend which returns value ahead of the expected completion of the sale of the bank to Coventry Building Society in Q1 2025.  

“The bank is in a strong position, maintaining a resilient, low risk balance sheet and sustained credit quality.” 

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Slape also said he was “very pleased with the bank’s momentum” as it reported a 2% rise in net mortgage balances in Q3 compared to the year ending 2023.  

When the acquisition was announced, Coventry Building Society said this would allow the mutual to “leverage its financial scale” and “diversified funding base” to invest in its branches and customer services and broaden its footprint. 

It also plans to remain a mutual. Co-operative Bank will be gradually integrated into Coventry Building Society over some years. 

In the first six months of 2024, Co-operative Bank said it saw the value of new mortgage applications rise to £2.6bn. 

Today, the lender also announced it had increased mortgage retention rates by as much as 0.36%, with changes to residential, buy-to-let and Help to Buy products.