The interim chief executive of the Co-operative said the group's losses arose principally from three causes.
Firstly, the continuing losses reported by the Bank as a result of the impairment of corporate loans, conduct issues and failed computer development projects.
Secondly, the write-off of our accumulated 115 year investment in the Bank following its emergency recapitalisation, in which we participated but in the process saw our shareholding fall from 100% to 30%.
And thirdly, a partial write-off of the goodwill created on the 2009 acquisition of the Somerfield food business following a strategic review of that business.
The final results for The Co-operative Group highlighted heavy losses that reflected:
- Significant losses at The Co-operative Bank (“the Bank”)
- Loss on reduction in Group’s shareholding in the Bank
- Impairment of goodwill which arose on the Somerfield acquisition
- Reduced sales in Food, impacted by disposal programme designed to focus business on its core convenience store chain
- Increased central corporate costs
The Co-operative Group has announced annual losses of £2.5 billion after suffering the worst crisis in its history following the near-collapse of its banking arm.
Interim chief executive Richard Pennycook said: "2013 was a disastrous year for the Co-operative Group, the worst in our 150-year history.
"Today's results demonstrate that but they also highlight fundamental failings in management and governance at the group over many years.
"These results should serve as a wake-up call to anyone who doubts just how serious the challenges we face are."
The Co-operative Group has reported annual losses of £2.5 billion, the worst in the company's history.
Co-op boss Niall Booker said the bank still had "significant issues" and almost collapsed because of a £1.5bn hole in its balance sheet.Read the full story ›
Co-operative Bank chief executive Niall Booker is to receive a total £2.9 million pay package for the financial year 2013 and could receive a further £1.2 million dependent on the bank's future performance.
On the publishing of the results, Mr Booker said the new management had succeeded in keeping "the bank alive".
Co-operative Bank chief executive Niall Booker said today's belated 2013 annual results "reflect the magnitude of the issues that have come to light" since he took charge of the troubled bank ten months ago.
However, he said he said "initial progress on our business plan is encouraging and we remain enthusiastic about the long term potential for the Bank".
"The level of change required in improvement in processes, systems and culture is significant," he said.
"We are determined to rebuild trust in the Bank after the events of last year and reward the loyalty our customers and shareholders have shown us."
The Co-Operative Bank has announced it will not pay £5 million in deferred payments to former bosses following its £1.3 billion loss in the 2013 financial year.
The Co-operative Bank has reported an annual loss of £1.3 billion for the 2013 financial year.
The Co-op group was plunged into fresh difficulties on Thursday, offering members a vote on its future after the resignation of senior independent director Lord Myners.
The Co-operative is to hand a £3.6 million pay deal to its chief executive, according to reports - despite facing a £2 billion loss after the biggest crisis in its history.
According to the Observer, Euan Sutherland will receive a base salary of £1.5 million this year, plus a £1.5 million retention payment. He joined the company in May last year, having been chief operating officer of B&Q owner Kingfisher.
The mutual argues that Mr Sutherland's proposed remuneration package will be in line with comparable firms and reflects the scale of the task he faces, the paper says.
But the pay award would come at a time when the group is facing large-scale job cuts after a disastrous year in which its banking arm needed rescuing due to a £1.5 billion hole in its balance sheet.