TSB profits slide as boss sounds off on bank levy
TSB SHARES were up slightly at the close yesterday, despite the bank seeing a double-digit drop in profits for the first half after being impacted by a number of factors, including the takeover by Sabadell.
The bank, which is being bought by Spanish group Banco Sabadell in a £1.7bn deal, said pre-tax profits were down 20.1 per cent to £44m. Statutory profits were down 44 per cent to £23.2m in the half year to 30 June.
The challenger blamed the slump on lower average loan balances and the Financial Services Compensation Scheme’s levy charge of £14.8m.
The bank’s new mortgage broker service, launched in January, received £1.9bn of gross mortgage applications to the end of June, with gross lending totalling £665m.
Chief executive Paul Pester said: “Customers are really starting to see TSB as a destination for their mortgages… On top of this, customers continue to vote with their feet and, for the sixth successive quarter, we exceeded our target of winning more than six per cent of all customers opening or switching bank accounts in the UK,” said Pester.
But the bank boss hit out at the governments’s plan to have an eight per cent surcharge on bank’s earnings above £25m and called on the chancellor to raise the lower exemption limit.
On the takeover, he said Sabadell’s buy-up of TSB at a premium of over 30 per cent to the float share price was recognition of the “excellent progress and great potential of the bank”.