TSB reveals record profits as higher interest rates boost revenue

TSB reveals record profits as higher interest rates boost revenue

TSB Bank has revealed its highest pre-tax profit since its relaunch in 2013, as increased lending and higher interest rates pushed its total income to more than £1bn.

The high street bank said its profit before statutory tax reached £183.5m during 2022, up from the £157.5m it made the previous year.

Total statutory income rose by more than 12% to £1.1bn, which TSB said reflected it lending more, as well as receiving more cash from higher interest rates and deposit spreads.

The lender saw a rise in borrowers raising their mortgage payments or paying them off early to fix a new product before their current rates expired in a “rapidly rising interest rate environment.”

However, the bank increased its impairment provisions to almost £55m to cover credit losses, from just £100,000 a year earlier, when it had “exceptionally” low charges thanks to the release of Covid-related provisions.



In challenging and unpredictable economic circumstances, TSB continues to be a purpose-driven and relevant brand, delivering the banking products and services our clients need most.

Robin Bulloch, TSB

The 2022 charge reflects the uncertain economic outlook and rising inflationary pressures for its clients, the bank said.

However, TSB insisted, like many other big banks, that it has not seen any significant increase in the number of customers experiencing financial difficulties or failing to make payments.

The bank also said it plans to pay a £50m dividend to its owner, Spanish bank Sabadell, for the first time, thanks to its “strong” performance all year.

Looking ahead, TSB said that while inflation is expected to ease this year, higher interest rates will challenge borrowers.

If the economy slows further, it risks higher unemployment, the bank said. The unemployment rate is often a leading indicator for banks of the health of family finances and therefore of their clients.

Robin Bulloch, Chief Executive Officer of TSB, said: “In challenging and unpredictable economic circumstances, TSB continues to be a purpose-driven and relevant brand, delivering the banking products and services our customers need most.

“With a relentless focus on improving our service and more satisfied customers, we have delivered a strong set of results for 2022.

“This includes balance sheet growth, reduction of underlying costs and overall profitability improvement and, for the first time, TSB will pay a dividend to our parent company Sabadell.

“I want to thank all my colleagues for rising to the challenges of the past year and helping build our clients’ financial confidence at a time when this has never been more important, as well as enthusiastically supporting our growth strategy for the next few years.”

TSB, which relaunched in 2013 after merging with Lloyds Banking Group in the 1990s, was fined £48.7m last month by city regulators for computer system glitches in 2018. that left millions of their customers without access to banking services.

On Thursday, TSB said it increased its targeted support for cost of living, helping 2,300 mortgage clients recover after struggling with payments and engaging with more than 40,000 clients most affected by the cost crisis.

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