THE scandal-hit Co-operative Bank saw losses nearly triple in the first six months of 2015 and warned yesterday that its recovery would take at least another two years.

Its performance remained dominated by the Co-op Group’s crisis two years ago, which drove it to the brink of collapse, and would continue to be for “some time,” the bank said.

Half-year losses rose dramatically to £204.2 million from £77m a year ago as the bank counted the cost of moves to put it on the road to recovery. It confirmed that it would not return to profit until at least 2017.

The Co-op has been battling to recover since a £1.5 billion black hole was discovered in its balance sheet in 2013.

It has been selling off risky assets and slashing branches to get its balance sheet back in shape, revealing that transactions at its branches were down 28 per cent year-on-year in the first half after slashing its network from 227 branches a year ago to 165.

Staff numbers have also been reduced “accordingly,” down 191 to 5,850, the Co-op said, although it has tried to transfer staff where possible, partly through outsourcing some of its back office business.

A damning official report last week found that the Co-operative Bank had misled investors and kept regulators in the dark during the 2013 crisis.

The Prudential Regulation Authority and the Financial Conduct Authority concluded that there had been serious failings in the way the lender was run between July 2009 and December 2013, but spared the bank a potential £120m fine after taking into account the state of its balance sheet.

Despite the losses, Co-op Bank chief executive Niall Booker insisted that the turnaround was on course, with the bank now better able to cope with wider economic stresses.

“Although the core bank remains a work in progress, its performance is also beginning to improve,” he said.

“Of course, we have always said that addressing legacy issues will continue to dominate financial performance for some time and there is considerable work ahead towards a full recovery.”