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  1. ITV Report

After the worst losses in Co-op's 150-year history - what next?

The Co-operative is poised to cut thousands of jobs after losses last year of £2.5bn, and is set to shrink in size drastically as it sheds large parts of its operations.

The interim chief executive of the Co-op, Richard Pennycook, admitted to ITV News that the results were "disastrous", and is ready to reshape a business that has sprawled to include food, funerals, medicine and eventually banking.

Richard Pennycook said 2013's results were the worst in its 150-year history.

"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years," he added.

The Co-operative provides an array of services including food, funerals and banking Credit: Nick Ansell/PA Archive/Press Association Images

"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."

The Co-op bank alone reported losses of £1.3 billion last year, and warned that a return to profitability was unlikely before 2016.

Niall Booker, who became chief executive of the bank in June, said it still had "significant issues" to resolve, having come close to collapse last year following the discovery of a £1.5 billion hole in its balance sheet.

The Co-op's interim chief executive admitted that the Group has suffered a "disastrous" year Credit: Rui Vieira/PA Wire/Press Association Images

The Co-op Group now owns 30% of the bank after a rescue that saw control handed to bondholders in a move avoiding the need for a taxpayer bailout.

Whatever shape the future Co-op takes, it will be a far leaner organisation than the current group.