Troubled lender the Co-operative Bank , which reported a £75.8 million pre-tax loss for the first half of the year, said it was encouraged by its progress since it was rescued from near-collapse last year when it made a full year loss of £1.3 billion .

While it remains in the red, the six-month loss is an improvement on the loss of £844.6 million in the same period last year.

It said the number of permanent employees of the bank had been slashed by 13 per cent in the first half of 2014.

The bank also said its capital position had been strengthened, following a £400 million capital-raising.

The business had to be rescued last year after a £1.5 billion hole was discovered in its balance sheet, in a deal which saw the wider Co-op group cede majority ownership of it to bondholders including US hedge funds.

Bank chief executive Niall Booker said: "Considering the scale of the challenge we faced a year ago, we are encouraged by the progress made to ensure the stability of the bank."

The bank closed 46 branches in the first half of the year and said more branches would be closed in the second half.

Mr Booker said the bank was "stronger than it was a year ago" and ahead of schedule in the disposal of unwanted assets, while the way the company was run at board level had improved - following a scathing report into its near-collapse.

He said: "However, the issues we continue to face in building a sustainable business are deep rooted and there remains much to be done. Transforming the organisation into a viable and profitable business which generates capital in the long term still requires significant change - both operationally and culturally."

The business has been at the heart of the wider Co-op group's difficulties as it faced the worst crisis in its history, which also saw a drugs scandal involving the bank's previous chairman, former Bradford councillor Paul Flowers.