TSB in £204m loss as deposits soar to £34bn

TSB CEO Debbie Crosbie

TSB Bank plc said on Monday its customer deposits soared 14% to £34.4 billion in 2020 “due to reduced customer spending and growth in business deposits as businesses maintained high levels of liquidity.”

However, TSB said it made a statutory loss before tax in 2020 of £204.6 million compared to a £46 million profit in 2019 “with financial performance significantly impacted by the Covid-19 pandemic.”

TSB said its £90.1 million reduction in total income to £894.8 million “primarily reflects the adoption of government and regulatory measures in response to Covid-19, lower overdraft income from regulatory driven pricing changes, lower interest rates and reduced consumer spending.”

Total customer lending rose 7.2% to £33.3 billion “driven by growth in core mortgages and business lending through the Bounce Back Loan Scheme.”

According to a Reuters report in November, TSB’s current parent Spanish bank Banco Sabadell gave Goldman Sachs a mandate to sell Edinburgh-based TSB.

On Monday, Sabadell said it expects TSB to break even in 2021.

TSB chief executive Debbie Crosbie said: “TSB’s underlying performance is much improved.

“We’re ahead of plan in delivery of our strategy and have relaunched our brand, all of which sets us up well for the future.

“However, the impact of the pandemic and the additional cost of restructuring overshadows our financial result for the year.

“We achieved record levels of lending growth in 2020, including mortgage applications exceeding £10 billion in a year for the first time, and we continue to grow deposits.

“We have also made TSB more efficient, with underlying running costs lower than in 2019. Our balance sheet and capital position remain strong.

“The strategic advantage of our digital platform is evident in the way we are responding rapidly to customers’ needs, including the launch of a new current account, introducing leading mortgage products and improving the overall experience for our customers.

“Throughout a challenging year, TSB colleagues excelled in supporting our customers and I want to thank all of them for their extraordinary service.

“Our priority going forward is our growth strategy, delivering exceptional customer experience and returning to profitability.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.