Challenger bank unveils maiden profit

TSB at “base camp” as bank sets out plan to add customers

Paul PesterTSB has “reached base camp” in its ambition to become a challenger bank, according to chief executive Paul Pester who unveiled a maiden profit this morning.

The bank, which was carved out of Lloyds last year, said it had secured an 8.4% share of all new and switching bank accounts with almost 500,000 bank accounts opened in the last 12 months.

Pester said the bank expected to consistently attract a greater than 6% share of new accounts this year that will allow TSB to grow its share of all bank accounts from 4.3% today towards 6%.

It is on track to launch its mortgage broker service with more than £300 million worth of applications already received.

He said: “2014 was a pivotal year for our business as we started to establish TSB as Britain’s challenger bank. In terms of financial performance, I’m pleased that, on balance, we’ve exceeded the expectations we set out at the time of our IPO in June last year. In addition, I’m delighted that we’ve made such a strong start in delivering TSB’s growth strategy.

“With 8.4% of all people switching or opening a bank account in 2014 choosing TSB; with the recent successful launch of our TSB mortgage broker service and with more people than ever before now recommending TSB to friends and family, it’s great to have reached “base camp” on our mission to bring more competition to UK banking.”

The bank unveiled a maiden profit of £133.7 million. Mr Pester said the bank had “clear headroom for future growth”,  Common Equity Tier 1 ratio at almost 20%, making it one of the strongest capitalised banks in the UK.

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