The Co-operative bank has reported pre-tax losses of £709.4 million in the first half of the year.

The losses are largely from writing off £496 million of bad loans, the result of merging with the Britannia Building society in 2009. Regulators have also demanded that it hold £1.5 billion more in capital as provision against its lending risk.

The group is beginning a four year turnaround, including restructuring that will result in an  unspecified number of job losses.

Euan Sutherland, the new Chief Executive of the Co-operative Group following a shake up of the Group’s executive board has said there is ‘no plan B’ for rescuing the bank if the current plan, which involves a stock market listing and ‘bail-in’ from bondholders of £500 million, fails.

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