Troubled lender the Co-operative Bank has narrowed half-year losses, but continued to shed banking customers and borrowers amid uncertainty ahead of its recent rescue deal.

The group said it lost around another 25,000 current account customers since the end of last year, while it also saw £400 million of instant access savings cash pulled out.

It confirmed it was partly hit by "retail customer reaction to uncertainty" surrounding the £700 million deal secured in June with its hedge fund investors - a move that will spell the end of its historic relationship with the Co-operative Group.

Chief executive Liam Coleman insisted the Co-op Bank had put in a "resilient" performance in its first half, with losses trimmed to £135.2 million for the six months to June 30 from £177 million a year earlier.

He added: "The vast majority of customers have remained very loyal as we have progressed the sale and capital raise process and I am extremely grateful for their ongoing support.

"Of course there is more hard work ahead, and, like other banks, we recognise there are risks to the UK economy, but this is a great bank and we are positive about the future."

Under the refinancing package agreed with its hedge funds, which is expected to complete in September, the wider Co-op Group's stake in the bank will shrink from 20% to around 1%, with the lender also agreeing to separate itself from the wider mutual's pension scheme.

But the bank will keep the Co-op branding and has pledged to retain ''values and ethics at its heart''.

The deal will give Co-op Bank the ability to meet regulations on long-term capital requirements, avoid it being wound down and allow it to continue as a stand-alone lender.

Mr Coleman said it had been a "challenging journey" for the bank in recent months, but added that customer account losses had "moderated" in May and June.

The group saw its full-time staff workforce fall by nearly 900 to just over 3,300 in the first half and Mr Coleman warned that the bank would cut its headcount further as it looks to trim costs.

This will mainly come from reductions in temporary staff and contractors - which halved in the first six months of 2017 - as well as through so-called natural attrition as employees leave but are not replaced.

Co-op Bank, which has four million customers overall, said its current account numbers fell by nearly 2% to 1.4 million in the first half, while loans fell to £15 billion from £15.3 billion a year ago.

It saw fewer mortgage completions - down £100 million at £1.4 billion - and redemptions almost doubled to £1.3 billion from £700 million a year earlier.

Instant access savings deposits fell around 3% as it was hit by customer uncertainty, while it also said it was managing a targeted reduction in fixed-term savings products.

The group's net interest margin - a key measure for retail banks - was affected by record low interest rates and competition in the mortgage market.

It also put by another £9.2 million to cover compensation for payment protection insurance (PPI) mis-selling.