Co-op bank reports after-tax loss of $1.2 billion

LONDON (AP) — Co-operative Bank reported a net loss of 781.5 million pounds ($1.2 billion) for the first half versus a 45.3 million pounds loss a year earlier as it struggles to rectify problems arising from the financial crisis.

The bank — a part of Britain largest mutual business — wrote off 496 million pounds in bad loans taken on in the 2009 acquisition of Britannia Building Society.

In its statement Thursday, the bank claimed it was turning things around. A rescue plan has been announced, with parent Co-Op Group pledging to fill a 1.5 billion pound ($2.3 billion) hole in the balance sheet by converting bonds into shares.

Moody’s has downgraded the bank’s debt and deposit ratings to junk status, arguing that Co-op failed to assess the losses from the Britannia portfolio.

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