Charges for bad debt rose 10.5 percent to 66.2 million.

The Co-Operative Bank, whose roots date back to 1872, is part of the Co-Operative Group, one of Britain's oldest mutual societies whose services range from grocery shopping to funerals.

The society was set up in northern England, originally to enable low income households to buy good food at reasonable prices and to boost the purchasing power of the working class.

Co-Op Bank has aimed to differentiate itself from its publicly-listed rivals through its ethical policy, though it remains a relatively small player. It has three million customer accounts, contrasting with Barclays Plc for example which has over 10 million UK current accounts.

Co-Op Bank's ethical policy states it will not invest in or provide financial services to organisations dealing in areas like the arms trade or blood sports, or organisations whose policies it feels may harm the environment.