Co-op Axes Finance Jobs

The cuts at the Co-operative Financial Services (CFS) division - which include online bank Smile, the Co-operative Bank and Co-operative Insurance - amount to about 10% of the group's 10,000 staff, the Daily Telegraph reports.

Manchester, where the Co-op is one of the city's biggest employers, will bear the brunt of the job losses, the newspaper says.

CFS, which declined to comment ahead of a statement later today, has 90 retail banks and 11 corporate banking branches across the UK.

CFS, known for its ethical business and investment policies, has about 6.5m customers in total and is responsible for about £20bn of customer savings.

But the job cuts come as the business faces increased competition for financial services from online rivals and supermarkets.

Last year CFS saw pre-tax profits fall by more than 13% to £146.2m as the business came under 'intense' competition and also suffered from increases in bad debts, personal insolvencies and investment costs.

The business axed 2,500 jobs in 2004 as part of an earlier cost-cutting programme.

CFS offers a range of services such as current accounts, credit cards and loans through its banking business, while its insurance division provides stakeholder pensions, unit trusts and insurance as well as independent financial advice.