The lender said it had seen high levels of demand for mortgages during the period, resulting in a strong mortgage pipeline going in to the second half of the year with £1.5bn of mortgage applications and an average margin of 200 basis points.
The lender added that 65 per cent of new business in the second quarter came from five-year fixed rate mortgages, which was up 12 per cent compared to the same period last year.
The average mortgage completion LTV was pegged at 57.9 per cent, which is up from around 56.1 per cent at the end of last year.
The Co-operative Bank re-introduced 95 per cent loan to value (LTV) mortgages and piloted a director mortgage product through a centralised telephony team.
Accounts that were greater than three months in arrears represent 0.11 percent of total accounts, slightly down from 0.12 per cent at the end of last year.
The lender said it provided payment deferrals to over 175,000 mortgage customers until the scheme ended in March. Of those, 98 per cent had now returned to full payment.
It also noted that there would be an increase in expenses in the second half of the year as it continued its multi-year strategic project to improve its IT platform for mortgages, but it expected to remain within market guidance.
In February, the board approved additional funding to accelerate the project, which should lead to reduced annual operating costs.
The bank reported a profit before tax of £21.4m, compared to a £44.6m loss in the same period last year. According to the lender it is the second consecutive quarter of profits.
Chief executive officer Nick Slape (pictured), said: “I am delighted to report that the relentless focus on delivering our plan is driving a strong financial and operational performance for the bank. As a result of a disciplined approach to cost alongside taking opportunities swiftly as they arise, we have delivered a second consecutive quarter of underlying and statutory profit.
“We have made excellent progress against the strategic priorities that we outlined at the end of 2020, remaining firmly on track to deliver our full year guidance and to return the Bank to sustainable profitability this year.”
