The Co-operative Bank has more than tripled its bonus pot for bankers after a “milestone year” that resulted in its first profit in a decade.
The ethical lender, which has struggled to turn a profit since 2011, announced it was paying bankers a total of £13.3m in bonuses for 2021, compared with a £4.2m bonus pot shared among its more than 3,200 staff in 2020.
Its chief executive, Nick Slape, who is the sixth boss to run the bank over the past nine years, said the payouts were “completely appropriate” given the lender’s return to profit. “There’s been a huge amount of effort 24/7 to make this happen, so I think is appropriate,” he said. “The bar has been set for 2022, and if we don’t deliver … then that won’t be the sort of number you see [next year].”
Slape took home a bonus worth nearly £1.2m, bringing his total pay to £2.4m for 2021.
The bank’s annual pre-tax profit of £31m, up from a £104m loss in 2020, marks the first time it reported a profit since 2011, when its earnings were £54m.
The bank benefited from a jump in mortgage applications and well as its cost-cutting programme last year. Like other banks, it also put aside much smaller amount of cash to help cushion the blow from the pandemic, compared with 2020.
The strong financial performance suggests the bank is starting to emerge from its near-decade of troubles. The depth of its financial difficulties first came to light in 2013 when a £1.5bn hole was discovered in its accounts following its disastrous takeover of the Britannia building society in 2009. The problem resulted in the bank being rescued by a group of hedge funds, which have since taken control of the lender.
Its reputation also suffered after the former chairman, the former Labour councillor and Methodist church minister Paul Flowers – nicknamed the Crystal Methodist – pleaded guilty to possession of cocaine, crystal meth and ketamine in 2014.
Slape said he expected the bank to report an even higher profit in 2022, which marks the bank’s 150th anniversary. “Our return to profitability and balance sheet growth at improved margins gives us a strong platform for further growth in the years ahead,” he said.
Read more:
Co-op Bank triples bonus pot after turning first profit since 2011