The Co-operative Bank has reported a large surge in charity business which it attributes to the sector's disillusionment with mainstream banks following the recession.

The Bank said figures for its Charity and Social Enterprise division showed lending grew by 55 per cent to £44m and charity customer numbers increased by almost 50 per cent in the year to November 2010.

It attributed the increase in business to cutbacks in incentives and rewards at other banks, along with customer perceptions that the bank is a responsible organisation with a clear ethical policy.

New teams for the North of England and Scotland were introduced last year to help the Bank support charities across the UK. 

Development of the Northern team has resulted in a near threefold rise in deposits to £103m and an increase in lending from £2m to £17m.

Barbara Hodgson, head of the Northern charity and social enterprise team, said: “There are longstanding similarities between the role of third sector organisations and the aims and values of The Co-operative in having a positive impact in communities and society.”