Balance sheet robust
TSB falls to loss but ‘able to weather downturn’
Debbie Crosbie: accelerating digital offer (pic: Terry Murden)
TSB chief executive Debbie Crosbie said the bank was “simpler and more efficient’ following investment in resolving its IT problems.
She insisted it was strongly capitalised to weather the downturn.
The bank reported a first half statutory loss before tax of £65.5 million, compared to a pre-tax profit of £21.1m in H1 2019.
Credit impairment charges increased by £87.5m compared to H1 2019, reflecting a significant weakening in the economic outlook, including higher forecast unemployment and house price declines.
The net interest margin of 2.49% (H1 2019: 2.76%) was impacted by Covid-19 customer support measures and a reduction in the mix of unsecured lending.
The bank has continued to grow its business banking customer base with almost 20,000 Business Current Accounts (BCA) opened in the first half of the year, including 4,000 businesses choosing to move to TSB through the Incentivised Switching Scheme compared to 6,300 BCAs opened in the same period in 2019.
Eighty of the 100 positions at TSB’s new IT centre in Edinburgh have been filled during lockdown, part of a £120 million investment in IT.
TSB told Daily Business that the majority of its office-based employees (c.3,500) are working from home and it is consulting with them on how best to return to work.
In a statement with the figures, Debbie Crosbie, chief executive, said: “We had a strong start to the year, but the external environment changed significantly when Covid-19 struck. We’ve benefited hugely from the technology platform we now have in place at TSB, enabling us to accelerate our digital offer for customers when they needed us most.
“Despite the challenging context, our balance sheet and capital position remain strong, we have improved efficiency in our operations, and our purpose to help people increase their money confidence has never been more relevant.”