29 July 2021

TSB Bank plc announces 2021 half-year results

TSB reports a statutory profit before tax of £42.9 million delivered through robust balance sheet growth, focused cost efficiency and lower credit impairments

Financial Results for the half year 2021:  

  • TSB reported a statutory profit before tax of £42.9 million, compared to a pre-tax loss of £65.5 million in H1 2020, and a pre-tax profit of £21.1 million in H1 2019. 
  • Total customer lending at £35.5 billion increased by £2.2 billion (+6.6%) in H1 2021 (£4.3 billion; +13.7% year-on-year), with growth driven by mortgages.
  • Customer deposits at £35.5 billion increased by £1.2 billion (+3.4%) in H1 2021 (£2.6 billion; +8.0% year-on-year), primarily reflecting the market wide impact of Covid-19 on consumer spending.
  • Credit impairment charges of £24.6m represent a decrease of £86.4m compared to H1 2020, primarily from unsecured portfolios, reflecting improvement in the economic outlook, including lower forecast unemployment and higher expected house prices.  
  • Net interest margin was broadly stable at 2.44% (H1 2020: 2.49%) with higher new business margins in mortgages offset by lower deposit margins and a reduction in the mix of unsecured lending.
  • The reduction in operating expenses to £405.7 million (H1 2020: £418.2 million) reflects ongoing progress on efficiency. This includes lower spend on resource and property, and a more normalised level of investment spend.
  • The balance sheet remains resilient, with a Common Equity Tier 1 ratio of 14.4% and Liquidity Coverage ratio of 148%.
  • These results represent strong progress on financial targets set in TSB’s 2019 strategy:
    • Customer lending and customer funds CAGRs in excess of 5%, with new business lending margins supporting stabilisation of the net interest margin
    • Balance growth underpinned by rigorous underwriting and credit controls
    • Executing on the restructuring and transformation plan, on track to deliver £100m cost savings in 2022

Debbie Crosbie, TSB’s Chief Executive, said: “These results show a significant improvement on last year and demonstrate the impact of our Money Confidence purpose in delivering for our customers. 

"With a relentless focus on what our customers want and innovating to serve them better, we have grown our balance sheet and increased income, while reducing operating costs further. 

“I want to thank everyone at TSB for their efforts in supporting our customers and communities, helping them feel more money confident and in driving TSB’s wider contribution in the first half of the year.”

Balance sheet and capital (£ million) At 30 June  
At 31 Dec 
 At 30 June 2020 Change 
vs. Dec 2020
vs. Jun 2020
Customer loan balances     35,530.3 33,317.9   31,261.3 6.6%  13.7%
Customer deposit balances        35,538.4   34,375.3   32,909.3 3.4%   8.0%
Group loan to deposit ratio 100% 97%     95%     3pp     5pp
Common Equity Tier 1 capital ratio1 14.4% 14.8% 19.4% (0.4)pp (5.0)pp
Financial performance (£ million) H1 2021 H2 2020 H1 2020 Change vs H2 2020 Change vs H1 2020
Total income 471.6  449.3  445.5  5.0% 5.9%
Operating expenses (405.7)  (409.5)  (418.2)  (0.9)% (3.0)%
Impairment losses (24.6)  (53.0) (111.0) (53.6)% (77.8)%
Management profit/(loss) before tax 41.3 (13.2) (83.7) n/a n/a
Restructuring and other one-off items     (12.0) (81.9)  (8.7)  (85.3)% 37.9%
Collection and recovery conduct charges      -  (55.0)     -    
Net effect of migration related items     10.1 5.0 29.1 102.0% (65.3)%
Banking volatility2 3.5 6.0 (2.2) (41.7)% n/a
Statutory profit/(loss) before tax 42.9 (139.1)  (65.5) n/a n/a
Net interest margin3 2.44%  2.45% 2.49%  (1)bps (5)bps
TSB asset quality ratio4 0.14%  0.32% 0.72%  (18)bps (58)bps
1 Fully loaded basis. The reduction in the CET1 ratio from 30 June 2020 reflects the previously announced adoption of regulatory changes to TSB’s secured credit risk models, the statutory loss in 2020 and growth in secured retail balances.
2 Reflects gains and losses on derivatives not in hedge accounting relationships, hedge accounting ineffectiveness, and volatility associated with share schemes.
3 Management basis net interest income divided by average loans and advances to customers, gross of impairment allowance.
4 Impairment losses divided by average loans and advances to customer, gross of impairment allowance. Calculated on an annualised basis.

Strong progress against the growth strategy set in 2019

  • Our three-year growth strategy to restore TSB’s competitiveness through a clearer focus on customer needs, was launched in November 2019. Built on three pillars: customer focus; simplification and efficiency, and operational excellence, the strategy has been key to TSB’s success in the first half of 2021, and is a key part of Sabadell’s strategic plan.  

A relentless focus on serving our customers 

  • A record mortgage performance with £5.8bn in applications - drawn down £4.8bn of completions – this is already over 80% of the full year lending in 2019. Margins remain healthy, and we received ‘Your Mortgage’ awards for best fixed rate lender and best direct lender. 
  • Our new Spend & Save current account share of flow in March was at its highest rate in over three years and we’ve opened over 70,000 accounts in the first half of the year. 
  • We launched a new partnerships marketplace to give more Money Confidence to customers, for example ApTap helps customers save money on their bills; Wealthify, enables customers to invest; and Freedom Finance offers customers alternative lending solutions. 
  • Over 3,000 colleagues have completed Money Confidence training (accredited by the Chartered Banker Institute) in our branches, contact centres and business banking to support our customers build their financial confidence and capability. 
  • We’ve grown our business banking customer base with 8,500 Business Current Accounts (BCA) opened in the first half of the year. And last week, we were awarded funds from Banking Competition Remedies (BCR) thanks to our record of over 10,000 small businesses choosing to switch to TSB under the Incentivised Switching Scheme.  

Accelerating simplification and efficiency to deliver leading digital services to our customers

  • Mobile is the channel of choice for the majority of our customers. Three-quarters of our digitally active customers now use the mobile app, and it is the sole digital channel for more than half of them.
  • 13 new features delivered in the mobile banking app including Confirmation of Payee and Conversational Banking. 
  • We’ve transformed the way we serve customers. TSB’s strong growth in mortgages has been supported by video banking which now accounts for over 90% of mortgage appointments (compared to 75% face to face and 25% telephony in 2019). Of these 25% were out of hours and we achieved a 100% satisfaction score from customers that used this channel. We’ve extended this support to business banking where sales are now 100% video. 
  • TSB Smart Agent – the highly efficient and AI-driven customer service portal – supported over 560,000 customer conversations in H1. In February, we launched this on mobile banking which now accounts for nearly half of our conversations with customers. 
  • Over 90% of all bank transactions and 70% of all product sales are through our digital channels.

Operational excellence – establishing an operating model that’s fit for the future

  • Ahead of schedule in branch transformation with 164 closures in the first half of the year and investing in our new network. 
  • 29 branches have been refitted in the first half of the year to create more inviting spaces for customers that focus on interactions over transactions, and a further 126 will be refitted by the end of 2021. Over 60% of branches are equipped with self-serve deposit capability and all branches have access to video banking capability. 
  • We are launching 43 ‘pop-ups’ this year with Mobile Money Confidence Experts, based in community spaces, to support customers’ banking needs. We are also taking part in UK Finance’s Community Access to Cash pilots and trialling a cash deposit service in areas of high cash dependency in local stores, in partnership with PaySafe.

Doing What Matters for Society

  • The Do What Matters Plan sets out our goals as a responsible business. TSB is the first retail bank to be accredited by the Good Business Charter and a signatory to the UN Global Compact. Highlights in the first half of the year include:
    • We remain the only bank with a Fraud Refund Guarantee and publish our reimbursement rates in full, refunding over 98% of customers who are victims of fraud. 
    • We announced a pathway to Net Zero emissions by 2030.  
    • We planted over 16,000 trees in H1 to offset every house move involving a TSB mortgage and launched an additional borrowing product with preferential rates for mortgage customers improving the energy efficiency of their homes.
    • We are signatories of the Small Business Commissioner’s prompt payment code – almost 97% of payments to small and medium businesses are made in an average of 7 days.  
    • Women make up 40% of our senior roles, well above the sector average (32%), and we have stretching targets for diversity and inclusion.  
    • Working with Hestia, we were the first bank to offer Safe Spaces for victims of domestic abuse in all of our branches.
    • We were the first bank to sign up to the government’s Kickstart scheme and welcomed our first new starters in June.    


The UK is still recovering from the pandemic, although the economic outlook is much brighter than it was at the start of the year. Even so, there are risks to the recovery, especially those related to the spread of Covid. There are also risks associated with the recovery itself – for example, concerns about higher inflation and the housing market.

Against this backdrop, TSB is well positioned as we enter the second half of the year. TSB remains a low-risk, well capitalised bank and has potential for significant value creation in the future. The growth strategy is boosting competitiveness and sharpening the cost-to-serve ratio. Our enhanced digital offer is underpinned by our modern IT platform and we are right-sizing and modernising our branch network to serve customers across the whole country. Our priority in H2 2021 is to deliver on our growth strategy, enhance our competitiveness and demonstrate that TSB is the leading challenger bank.

Media Contacts

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

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

Joseph Eyre, Senior Media Relations Manager 
T: 07483 432 546 | joseph.eyre@tsb.co.uk 

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