No word on Higgins successor
Tesco Bank slips as group makes progress
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.
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.