CO-OPERATIVE Bank chief Niall Booker said the troubled lender still had “much to do” as its annual losses narrowed but warned of job losses and dozens of branch closures to come this year.

Mr Booker – who has signed a deal to stay at the bank until the end of 2016 – said it was still in the early stages of its turnaround after its near-collapse in 2013.

Pre-tax losses narrowed to £264.2 million from £632.8 million the year before and Mr Booker said it expects to be loss-making for at least two more years.

The bank lost a net 22,000 current account customers through switching – which Mr Booker described as “remarkably small” following the scandals that have engulfed it.

Co-op bank is to close 57 branches this year after it reduced its network by 72 in 2014. Staff numbers fell by 993 to 5,711 last year and Mr Booker said that further job losses were inevitable as costs are cut.

The lender had to be rescued in a deal which saw the Co-op’s stake shrink from 100 per cent to 20 per cent as it ceded majority ownership to bondholders including US hedge funds.

Further reputational damage was caused after a drugs scandal involving former chairman Paul Flowers, a former Bradford councillor, and criticism about how the Methodist minister was appointed to the role despite a lack of experience.

Mr Booker said: “The Co-operative Bank is stronger than a year ago and we end the year with a strengthened capital position.

“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. Although the bank is stabilising it is not yet fully docked in the safe harbour.”