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No word on Higgins successor

Tesco Bank slips as group makes progress

Benny Higgins

Benny Higgins: retiring

Tesco Bank marked its 20th anniversary with a 4% fall in half-year underlying profits to £110.7m against £115.3m last time.

Profit before tax was 143.9% higher at £112.2m against last year’s figure of £46m which was impacted by a £45m charge for mis-sold payment protection insurance.

There was no provision for PPI in the latest figures but there were oganisational restructuring costs of £21.8m.

Loans and advances to customers have increased by 8% to £10.8bn (February 2017: £10.0bn).  Mortgage balances reached £2.5bn (February 2017: £2.2bn) as the mortgage product range continues to expand into the intermediary broker channel.

The group has also seen growth in both credit cards and personal loan balances of 5.8% and 5.2% respectively.

Customer deposits have increased by 5.1% to £8.9bn (February 2017: £8.5bn), and continue to be the main source of the group’s funding.  Deposits from banks at 31 August 2017 totalled £939m (February 2017: £499.8m).

The Edinburgh-based subsidiary of the Tesco supermarket group gave no update on a successor to CEO Benny Higgins who announced in July that he would be retiring from the post.

Tesco group chief executive Dave Lewis said it was making “strong progress” and reported that sales rose for the seventh quarter in a row.

Like-for-like sales, which strip out new store openings, increased by 2.1% in the second quarter.

Pre-tax profit was also up, rising to £562m for the first half compared with £71m for the same period last year.

Tesco said it would pay a dividend for the first time in three years, which it said reflected “board confidence”.

The results come as Tesco is awaiting the results of an in-depth competition probe into its proposed £3.7bn takeover of wholesale giant Booker.

The Competition and Markets Authority (CMA) is expected to report its provisional findings next month, with a final decision due in December.

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