TSB profits tumble as merger charges take toll
Challenger bank TSB saw profits drop by more than a fifth last year as it was impacted by merger charges and investments to grow its mortgage book.
TSB - spun out from Lloyds Banking Group and then taken over by Spanish rival Banco de Sabadell last March - said management pre-tax profits fell 20.9% to £105.7m in 2015 as it also faced a fall in charges levied on customer accounts.
But franchise lending at the bank increased by £2.3bn to £21.1bn, helped by the launch of a service allowing brokers to provide its mortgages.
The lender said it notched up 1,000 new customers every day in 2015, helping deposits increase 5.2% to £25.9m.
It also confirmed that it had bought £3bn of ex-Northern Rock loans over the period.
The group's results follow figures on Wednesday from Santander and an update from Ulster Bank Royal Bank of Scotland, which revealed further pain in the long-running payment protection insurance (PPI) scandal.
RBS confirmed it would report another loss for 2015 after mammoth charges, including another £500m for PPI mis-selling claims, while Santander's full-year profits were hit by a £450m PPI charge.
TSB chief executive Paul Pester said the bank was "well-ahead of its growth strategy". He added: "Balance sheet growth has been strong and profits, while exceeding our plans, have declined as expected, on both a management and statutory basis."
He said the bank welcomed more competition in the market from other challenger banks and said it was working closely with the Competition and Markets Authority to free the banking industry from the "strangle-hold" grip of the major high street lenders.