The UK's Cooperative Bank has dropped its plan to implement a new core banking platform from Infosysby writing off £148 million in IT costs as the losses widen.
The technology woes were catalogued in the troubled bank's half-year results announcement in which it revealed escalating losses of £709 million due to loan impairment charges, customer mis-selling provisions and the IT write down.
As part of an effort to fill a £1.5 billion capital shortfall identified by regulators earlier this year, the Cooperative Group has accelerated plans to split the business into an asset management unit carrying the bulk of the bank's bad loan losses and the core bank, which will continue to concentrate on supporting retail banking and smaller business customers.
In a conciliatory statement announcing the results, Niall Booker, Chief Executive Officer, says, Work is continuing to finalize the exact details of the shape and structure of the core bank, the systems underpinning it, the product range and target customer base as well as the cost take out required to return the business to profitability.
The full extent of the Coop Bank's problems emerged following its ill-judged takeover of the Britannia Building Society in 2009 and the collapse of a deal buy 630 Lloyds branches back in April.
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