The Co-operative group has been hit with more than half a billion pounds worth of losses in the first half of this year, after sizeable write-offs at its troubled banking arm.
The group said it had lost £559m in the six months to end of June, having written off £496m of bad loans at Co-op Bank.
Including the write-downs, Co-op Bank alone reported a total loss of £709m. before tax, compared to a loss of £58.6m the previous half year. The Co-op Group's food and other businesses reported profits which offset the loss a little.
The bad loans relate mostly to Britannia Building Society, which merged with Co-op Bank in 2009.
The bank has faced pressure from regulators to strengthen its balance sheet after revealing earlier this year it had a £1.5bn capital shortfall, and is planning on disposing assets and tapping bond holders to plug the gap.
However, its situation is perilous, as the bank's chairman Richard Pym identified.
He said both the Co-operative Group and holders of the bank's subordinated capital securities will contribute broadly equal amounts to generate £1bn of the total additional £1.5bn core capital required to secure the Bank's future.
"In addition, in 2014, contingent on a successful exchange offer, the Co-operative Group will contribute up to a further £0.5bn expected to be funded primarily through the sale of its insurance businesses. The execution of the Exchange Offer is vital to stabilising the Bank's capital position; indeed, we will not remain a going concern without it."
He said the group expects to announce further details in the fourth quarter.
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