The Co-operative Bank has said its radical turnround plan is on track as it de-risks the balance sheet and focuses on its core personal and small business customers.

The Co-op in a first quarter update said a £1.5 billion residential mortgage securitisation earlier this month put it on track to hit revised targets set by regulators following Bank of England stress tests.

At a recent banking conference in Edinburgh, the bank's first new non-executive director Derek Weir said the regulators had decided to put further stress tests on hold until the bank had addressed its core problems.

The bank, now owned by hedge funds and distressed debt investors, plans further efficiency initiatives this year including improved processes, outsourcing some back office functions, and shrinking its ATM network.

The Coop has lost £900m in the past two years and closed 72 branches last year with a further 57 to disappear in 2015.

Niall Booker, the former HSBC executive who took over at the helm in 2013 and is committed to stay another 18 months, said: "There is considerable work ahead to address legacy issues across all areas of the business. Furthermore, the bank remains exposed to external macroeconomic conditions, including the timing of future interest rate rises and market conditions to support successful asset disposals, but we are pleased with the progress management has made in the areas we control and in what remains the early stage of our recovery."