The bank's interim results are the first since it reported a full-year loss of £1.3 billion for 2013.
While it remains in the red, the six-month loss is an improvement on the loss of £844.6 million reported in the same period last year.
It said the number of permanent employees of the bank had been slashed by 13% 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.
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."