The Q1 2022 results also showed that net mortgage growth for the first quarter of the year stood at £72m as it actively reduced new business volumes to preserve bank margins.

Meanwhile, average application margins decreased by 8 basis points (bps) from the previous quarter to 80bps.

The bank also reported a pre-tax profit of £30.5m for the quarter and an underlying profit of £27.5m, which represented the fifth consecutive quarter of profitability.

Net interest income has increased by 40% to £99.9m, which the bank said was driven by higher mortgage balances at improved margins, supported by improving deposit margins following the increases in the base rate to 75bps.

Operating expenditure increased by 3% to £84.7m, which the bank said was due to higher staff costs relating to performance-related pay and £1.7m of exceptional spend relating to its mortgage and savings simplification programme.

The Co-operative Bank chief executive Nick Slape says: “We are currently mid-way through our ambitious transformation plan to rationalise our mortgage and savings platforms and bring our mortgage servicing operations in house. These changes enable us to invest in simpler transactional journeys with an enhanced customer experience.”

“The progress we have made along with the steps we are taking to improve recruitment and retention in light of the challenging environment gives me the confidence that we will achieve the objectives set at the start of the year,” Slape adds.