TSB, the UK banking business of Spain’s Sabadell, has reported a statutory profit before tax of £101.3 million for the first quarter of 2025 — up 89.7% from £53.4 million in Q1 of 2024, and up 7.1% from £94.6 million in Q4 of 2024.

TSB said the year-on-year increase was driven “by higher income, supported by some one-off items, as well as lower costs.”

Total customer lending grew £100 million to £36.4 billion from 2024 year-end, driven by higher mortgage lending.

Total customer deposits remained broadly unchanged at £35.1 billion.

Sabadell CEO Cesar Gonzalez-Bueno told Bloomberg he expects more conditions will be imposed on a potential takeover of his company by rival BBVA, after Spain’s antitrust agency approved the offer with some remedies.

“There is a social uproar against against this deal,” said Gonzalez-Bueno said in an interview on Bloomberg TV. “We can expect that there could be further remedies.”

BBVA said in December it is undecided whether it will sell TSB if BBVA succeeds in its takeover of Sabadell.

TSB said its Q1 operating expenses reduced by 4.7% to £195.1 million in Q1 2025 “reflecting continued cost control and the implementation of strategic initiatives to further simplify the business.”

Income increased 14.4% to £312.9 million in Q1 of 2025 “which is driven by higher structural hedge income and supported by some one-off items.”

TSB’s net interest margin (NIM) was up 28 basis points versus Q1 of 2024 to 2.89%, increasing from Q4 2024 by 13bps.

TSB CEO Marc Armengol said: “TSB has delivered an exceptional performance in the first three months of 2025 and continues to make an increasing contribution to Sabadell Group. It is encouraging to see margins improving and costs continuing to reduce, alongside the benefit of some one-off items.

“I’d like to thank my colleagues for their commitment and hard work every day to make TSB more efficient and an even better bank for our customers. We are well-placed for future growth as we look to deliver even more for our customers.”