Co-operative Bank plunged to a £709m loss for the 26 weeks to July 6 and the bank cautioned that unless bondholders accept a painful restructuring the bank could go bust.
Mr Sutherland, a Scot who ran do-it-yourself chain B&Q before joining Co-op in May, said: "There are no quick fixes here. This will be a challenging four-year turnaround that begins with our comprehensive plan to restore the bank to stability."
While rebuilding the bank is a "vital first step" he signalled a desire to overhaul the wider group "updating and getting more relevance into modern mutuality".
He insisted Co-op Bank could be a "challenger" to the established high street names "even though it will be a far smaller business than the previous management envisaged".
He said it was too early to comment on how many of the bank's 10,000 employees would lose their jobs or how many of its 320 branches, including four in Scotland, would close. But he insisted costs had to be cut.
Co-op Bank has a £1.5 billion capital hole and in June unveiled restructuring plans that could see bondholders take a 30% loss.
A group of bondholders is fighting the plans which have to be approved at a vote expected in November.
Co-op Group finance director Richard Pennycook said it had no intention of reviewing its plans and warned that if the scheme was defeated, the bank would go under.
"If we cannot satisfy the requirement of the regulator to raise this capital we do not have a bank that is a going concern," the former finance director of Wm Morrison supermarkets said.
"That, for bondholders, would be pretty unpalatable."
Under its rescue plan, the details of which will be set out in October, the Co-op Group will contribute £1bn garnered from disposals and restructuring and fund another £500m by writing down the value of its bonds.
The scheme will see the bank listed on the stock market in the fourth quarter of this year.
"There is no plan B," Mr Sutherland said.
But Mark Taber, who represents rebel retail bondholders in the bank, said it was "disgraceful" there was not yet more detail about the scheme.
Unveiling the first set of banking results since he became the bank's chairman in June, Richard Pym said "there is no hiding that they are disappointing".
Co-op Bank took an impairment charge of £496m on its loan book, much of it on commercial property loans made by the Britannia building society which it acquired in 2009.
The bank's chief executive Niall Booker, also a Scot, said this was largely down to a "more professional work out approach" under its new management.
"It has certainly not been kitchen sinking," he added.
But he cautioned the bank would not be profitable "for some years".
The bank took a £148.4m writedown on its information technology and put £61m aside for customer compensation, including another £25m for payment protection insurance mis-selling.
The bank also swallowed £34.6m in costs relating to its abortive bid for Lloyds Banking Group's Project Verde portfolio, which included Lloyds TSB Scotland.
The collapse of that deal in April led to the revelation that the bank had capital problems.
A Bank of England spokesman said: "The Prudential Regulation Authority (PRA) anticipated the likely scale and source of these losses when it made its assessment of the bank's capital position in June.
"Consequently, the announcement today does not affect the PRA's assessment that the Co-operative Bank has a capital shortfall of £1.5bn."
Co-op's food retailing business, which has 400 stores in Scotland, made a £117m profit, flat on the same period last year, and earnings at its funerals arm rose 16% to £42m.