The Co-operative Bank has narrowed statutory pre-tax losses to £264.2m and operating losses to £55.3m but confirmed that dozens more branches would close in 2015.
Chief executive Niall Booker, who has just been given a contract extension, said the Manchester-headquartered bank is stronger than a year ago but warned there is "still much to do to transform the organisation into a sustainable business".
In its annual accounts for the 2014 calendar year, the Co-operative Bank reported statutory pre-tax losses of £264.2m, compared with losses of £632.8m a year earlier including a £688.3m liability management exercise gain. Operating losses were reduced to £55.3m from £662m over the same period.
The bank also said that the capital position of the bank has strengthened following the capital raising and the capital injection from the Co-operative Group.
Moreover, it advised that the performance of the core bank stabilised in the second half of 2014, with the number of primary current accounts steadying and the mortgage pipeline improving compared to the early part of the year. And it said that the focus for management in 2015 continues to be the turnaround of the bank, making it more resilient and implementing a plan with a view to building a profitable bank focused on retail and SME customers over the longer term.
However, the Co-operative Bank also provided an update on its ongoing work towards 'simplifying of the business and reducing underlying costs'. It said that the size of its branch network reduced by 72 branches in 2014 and announced a programme to close a further 57 branches later this year, leaving a network of 165 branches.
Booker said: "Over the course of 2014 the management team has continued to take significant steps to implement the strategy and to turn the bank around.
"The Co-operative Bank is stronger than a year ago and we end the year with a strengthened capital position, ahead of schedule in the reduction of non-core assets and having made progress reducing underlying costs and improving the day-to-day management and governance.
"However, we are in the early stages of the turnaround and there is still much to do to transform the organisation into a sustainable business."
Meanwhile, the board revealed that it has agreed an employment contract to retain the services of Booker until 31 December 2016. The principal terms of the CEO's current remuneration package, agreed on his joining the Co-operative Group in 2013, were due to come to an end in June 2015.
Chairman Dennis Holt said: "The Co-operative Bank's survival was in doubt when Niall joined the bank in June 2013 and the progress we have made from that crisis point is in no small part due to his leadership through the turmoil.
"There is still a considerable task ahead of the bank as it continues to build its resilience, to restore its brand and to transform the organisation into a sustainable business. The board is confident that Niall will continue to provide the direction required as we progress our plan and I am delighted that he has committed to lead the Co-operative Bank over the next period of its turnaround.
"The incentive structure agreed with Niall will continue to support the restoration of the Bank as a resilient, sustainable and soundly-capitalised financial institution in line with the objectives of our shareholders, our regulators and our customers."