TSB branch

TSB expects significant profit decrease in 2017




TSB has announced that it expects to see a significant reduction in its profit before tax during 2017.

The bank expects that the prevailing low interest rates, the contractual increase of more than £100m in the outsourcing fees it pays to Lloyds Banking Group as well as the continued roll-off of the mortgage enhancement portfolio will lead to a reduction in its profit before tax in 2017.

The news comes after TSB announced that it saw statutory profit, before tax, rise to £182m in 2016, an increase of 169.2% on 2015’s £67.6m.

This is after TSB saw management profit climb 68.1% to £177.7m during 2016, while also recording £6.6bn of new mortgage advances throughout last year.

TSB hopes to migrate its banking platform – currently provided by Lloyds Banking Group – to a new platform designed by shareholder Sabadell by the end of 2017, which will reduce its costs considerably in years to come.

Paul Pester, CEO of TSB, said he was impressed by the growth the lender has achieved during 2016 with it now serving over five million customers. 

“We’ve grown at twice the pace we aspired to back in 2014. 

“More people chose TSB than ever before in 2016 and we are now Britain’s most recommended high street bank. 

“I’m delighted that our partners will share in this success with the TSB Award paying out 12.5% of basic salary – equivalent to more than six weeks’ pay – and over £28m in total.”

TSB is planning to continue investing in both its digital and branch network to make sure customers receive a high level of service. 

Paul felt that 2016’s work will help TSB offer more new products and services for customers in the future, which would help bring more competition to UK banking. 

“I’m proud that since our relaunch back on to high streets across Britain, we’ve been able to do our bit to make banking better for UK consumers, however, we can’t do this alone. 

“We will continue to work closely with the government, policymakers and regulators in an attempt to bring the full force of competition to bear on the UK banking market. 

“Only then will the culture of UK banks finally shift to putting the interests of customers first.”

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