Co-operative Bank records profit but low interest rates hit turnaround plans

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The Co-operative Bank swung to profit in the nine months to September, but said low interest rates and uncertainty surrounding Brexit had dragged on its turnaround plans. 

The bank said it recorded an operating profit for the nine months to September 30 -  compared to an operating loss over the same period last year - but did not release the figures ahead of its full-year report. 

Profit was driven by government bond sales and a reduction in the Financial Services Compensation Scheme levy.

However, on a quarterly basis, the core bank recorded a "small" operating loss.

The bank cheered the addition of 11,000 new current accounts since June 30 to total 1.4 million, aided by a competitive £150 account switching offer. 

Operating costs were slashed by 10% over the period, with the bank saying that five branch closures announced in August would be completed by the end of November

However, chief executive Niall Booker said the bank's efficiency drive was facing some roadblocks. 

"Delivering some elements of the turnaround plan will become more challenging given that interest rates are now likely to be lower for longer and given the uncertainty surrounding the impact of the UK's decision to leave the European Union," Mr Booker said.