SCOTTISH banker Niall Booker has extended his contract with the Co-operative Bank to oversee the next two years of its turnaround which will involve further job cuts and branch closures.

Mr Booker, a former pupil of Glenalmond College in Perthshire who went on to spend three decades in a variety of roles with HSBC, took over at Co-op in the middle of 2013 following the discovery of a major hole in its finances.

That subsequently led to its bondholders taking control with Co-operative Group becoming a minority shareholder.

Mr Booker's current arrangements had been due to come to an end in June this year but he will now stay on until at least the end of 2016.

Dennis Holt, chairman, said, "The Co-operative Bank's survival was in doubt when Niall joined in June 2013 and the progress we have made from that crisis point is in no small part due to his leadership through the turmoil.

"There is still a considerable task ahead of the bank as it continues to build its resilience, to restore its brand and to transform the organisation into a sustainable business.

"The board is confident that Niall will continue to provide the direction required as we progress our plan and I am delighted that he has committed to lead the Co-operative Bank over the next period of its turnaround.

That announcement came as the bank confirmed it had trimmed losses from £633 million to £264m in 2014.

However 57 more bank branches are being closed during the course of 2015 although the three Scottish sites, in Aberdeen, Glasgow and Edinburgh, are unaffected. Mr Booker suggested more job cuts are likely.

The bank's annual report showed Mr Booker received a £3.1m pay package last year and will be in line to receive up to £4.5m each year as part of a new remuneration plan.

The bank shut 72 branches last year and the proposed closures for this year will leave it with a network of 165.

Staff numbers have also fallen by around 1,000 to 5,700.

Mr Booker said: "Over time it seems likely the branch network will reduce in line with customers' increased use of digital channels."

He also warned it is likely the bank will continue to be loss making for another two years.

He said: "Our results reflect the progress we have made to date as we simplify and reshape the business to focus on our personal and small and medium sized business customers.

"The Co-operative Bank is stronger than a year ago but we are in the early stages of the turnaround and there is still much to do to transform the bank into a sustainable business."

There was said to have been a £2.2 billion reduction in non-core assets during the year.

Co-op Bank now plans to try to increase the pace of its assets sales with a portfolio of residential mortgages, called Optimum, a major focus.

Mr Booker also said investment in systems and digital capability still needs to be made.

He said: "We have made progress on improving day-to-day management, in beginning to embed cultural change across the organisation and in improving our governance.

"Although there is still considerable work ahead to simplify our product range and build the required resilience in the bank, not least in the bank's IT systems, we continue to make progress on embedding a revised risk management framework and in improving the bank's controls."

Charges for misconduct and legal related issues, including the mis-selling of insurance products, were £101.2m last year, from £411.5m in 2013.