30 January 2020

TSB announces 2019 Full Year Results

TSB returns to profit and balance sheet growth

Financial highlights for the year to 31 December 2019:

  • TSB’s statutory profit before tax in 2019 was £46.0m, with net post-migration impacts broadly neutral in the year. This compared to a pre-tax loss of £105.4m in 2018.
  • The £151m improvement in financial performance was primarily driven by the non-recurring effect of the net migration-related costs and losses incurred in 2018. 
  •  Underlying business performance saw a return to balance sheet growth: 
    • Customer loans increased by 3.6% (£1.1 billion) to £31.1 billion driven predominantly by growth in mortgage lending;
    • Customer deposits increased by 3.7% (£1.1 billion) to £30.2 billion reflecting growth in Personal Current Account balances and business banking deposit balances (up by 20.7%).
  • Ongoing competitive pressures and a lower level of unsecured lending resulted in modest softening in TSB’s net interest margin to 2.75% (2018: 2.87%), partly offset by lower impairment losses.
  • TSB’s costs increased, largely due to strategic investment and business restructuring.  
  • TSB's liquidity is robust, with a liquidity coverage ratio of 231%, while its capital position remains strong with a Common Equity Tier 1 ratio of 20.6%.  

Debbie Crosbie, TSB’s Chief Executive, said: “TSB is back to doing what it does best, focusing on serving customers and innovating to meet their needs. We have returned to growth, making good, steady progress in customer loans and deposits.

"We know that customers want something different and better from their bank. Every day, more of our customers are taking advantage of our improved digital offer for their banking and, as the only bank to offer a Fraud Refund Guarantee, we’re on the side of the customer on the issues that matter to them.

“While the market remains competitive, I am confident that with our new strategy and clear purpose, TSB is well positioned to deliver even more for our customers.”


Financial results

Balance sheet and capital At 31 Dec 2019 At 31 Dec 2018 Change
Total customer lending (£million) 31,075.8 30,008.5 3.6%
Total customer deposits1(£million)   30,182.4 29,094.3 3.7%
Loan to deposit ratio 103% 103% -
Common Equity Tier 1 capital ratio 20.6% 19.5% 1.1pp
Financial performance At 31 Dec 2019 At 31 Dec 2018 Change
Management profit before tax – excl. post-migration costs (£ million) 76.8 173.3 (55.7)%
Post-migration charges (£million) (35.6) (330.2) (89.2)%
Recovery of additional post-migration charges (£million) 39.6 153.0 (74.1)%
Managment profit (loss) before tax (£million) 80.8 (3.9)  
Migration related income from LBG (£million) - 318.3 (100.0)%
Costs of preparing for TSB’s migration (£million) - (417.3) (100.0)%
Banking volatility2 (£million) 8.9 (8.7) 202.3%
One-off items3 (£million) (43.7) 6.2 (804.8)%
Statutory profit / (loss) before tax (£million) 46.0 (105.4) 143.6%
Net interest margin4 2.75% 2.87% (12)bps
Asset quality ratio5 0.20% 0.24% (4)bps
1Comparative information for customer deposits has been re-presented to be consistent with the current year.  As a result, fair value hedge accounting adjustments of £(10.0) million, previously included in customer deposits have been removed.
2Banking volatility reflects gains and losses on derivatives not in hedge accounting relationships, hedge accounting ineffectiveness, and volatility associated with share schemes.
3One-off items reflect costs of restructuring the bank including £21.9 million in respect of costs of the branch closures announced in November 2019 and £16.6 million relating to the reorganisation of head office functions.
4Net interest income divided by average loans and advances to customers, gross of impairment allowance.
5Impairment charge on loans and advances to customers divided by average loans and advances to customers, gross of impairment allowance.

TSB’s progress in 2019:

TSB continues to deliver against the key areas it set out at the beginning of the year and which remain fundamental to the Bank’s new strategic plan: relentless focus on serving customers; harnessing the modern technology platform; and to focus on efficiency and investing in the right areas of the business. 

Relentless focus on serving customers 

  • TSB has taken a leading position to help protect customers and communities against the rise of fraud, reaching over 10,000 people through its fraud awareness workshops. In addition to launching the UK banking first ‘Fraud Refund Guarantee’, the only bank to offer this level of protection to customers, TSB has forged partnerships with the Metropolitan Police Service, Hertfordshire Police and Thames Valley Police, as well as CrimeStoppers, in pursuit of the criminals who target customers.
  • TSB has partnered with a number of fintech and third-party providers to deliver innovative solutions to its customers. The Bank’s partnership with Square gives small business owners fast, affordable access to credit and debit card processing – issuing over 1,700 terminals in 2019. TSB’s electronic ‘selfie’ identification and verification solution, through Jumio, means customers can open an account instantly through the digital channel and don’t need to go into a branch to present their ID. And TSB has partnered with Vocalink to help protect TSB customers against falling victim to payment fraud.
  • In Business Banking, TSB continues to grow its customer base with a leading business banking offer which includes the ability to apply for a business current account in 10 minutes. The Bank is seeing strong momentum in customer numbers, with 2,600 businesses choosing to move to TSB, through the Incentivised Switching Scheme. 

Harnessing the modern technology platform 

  • TSB announced this month that it has selected IBM Services as its strategic partner, operating the platform, to accelerate the Bank’s ambition to become a truly digital business. 
  • The Bank announced the launch of the TSB Technology Centre in Edinburgh, creating around 100 new technology roles. The hub will be used to develop innovative services for TSB’s five million customers. 
  • More TSB customers are banking through digital and mobile channels, with an 18% increase in mobile app users, compared to 2018. Over three quarters of customer transactions are now carried out in automated banking channels.1
  •  IT incidents are now in line with, or better than, the levels of other banks in the industry (Financial Conduct Authority data).  

Focus on efficiency and investing in the business 

  • In November 2019, TSB unveiled its new three-year strategy to become a simpler organisation to compete effectively and build deeper customer relationships.
  • TSB will deliver net cost efficiencies, after absorbing the impacts of inflation and amortisation from investment, of around £100 million over the next three years. 
  • The Bank will invest £120 million in digital capabilities over the next three years.


During 2019, UK economic and market conditions were challenging and uncertain, and remain so. The UK’s exit from the European Union, slow gross domestic product growth and an ongoing low interest rate environment all contributed to uncertainty for financial markets and businesses going into 2020. TSB is a strongly capitalised bank and, by maintaining a healthy liquidity reserve, is well placed to weather economic volatility or shocks. Expected organic lending growth and the adoption of the regulatory change to a 90-day definition of default on the mortgage portfolio, required for all UK banks by the end of 2020, is expected to result in a reduction in the CET1 ratio to circa 16% in 2020. 

Looking to the future, TSB is a trusted brand and now operating on a modern banking platform. The three-year strategy unveiled in November 2019 is designed to strengthen the Bank’s competitiveness and deliver a revised business purpose; Money Confidence. For Everyone. Every Day. Under new executive leadership, TSB will become a simpler organisation, competing more effectively, with a relentless focus on its customers.  

- ends - 

TSB Banking Group plc’s Annual Report and Accounts for 2019 can be viewed here.

Media Contacts

George Gordon, Communications and Corporate Affairs Director | 020 7003 9369 | george.gordon@tsb.co.uk

Supreet Thomas, Head of Communications | 07519 502 123 | supreet.thomas@tsb.co.uk

Investors and analysts: 020 7155 3888 |  investorrelations@bancsabadell.com

Notes to editors

1In December 2019, covering online, mobile, IVR and ATM transactions.