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26th January 2023

TSB Bank plc announces 2022 results

TSB reports record statutory profit before tax of £183.5 million, up 16.5% on 2021; and proposes to pay Sabadell a dividend for the first time.

Robin Bulloch, TSB’s Chief Executive, said: “In challenging and unpredictable economic circumstances, TSB continues to be a relevant, purpose-driven brand offering 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, reduced underlying costs, and improved overall profitability. And, for the first time, TSB will pay a dividend to our parent company, Sabadell.

“I want to thank all of my colleagues for rising to meet the challenges of the past year and helping to build our customers’ money confidence, at a time when this has never been more important, as well as enthusiastically getting behind our growth strategy for the coming years.”

Financial Results (unaudited) for the full year 2022

  • TSB has reported its highest statutory profit before tax since TSB relaunched in 2013, of £183.5 million, compared to £157.5 million in 2021. This includes the impact of the fine from the FCA and PRA of £48.7 million relating to the 2018 migration programme. Profit measured on a management basis increased from £182.6 million to £271.6 million, up 49% year on year.
  • Given the strong performance, TSB proposes to pay a dividend of £50 million to its parent company in the first quarter of 2023, subject to shareholder and regulatory approval.
  • Total statutory income increased £122.9 million to £1,107.9 million (+12.5% from £985.0 million in 2021) primarily reflecting the impact of lending growth and higher interest rates and deposit margins.  This was partially offset by lower mortgage margins in a highly competitive market. Net interest margin increased 13 basis points in 2022 to 2.57% (2021: 2.44%).
  • On a statutory basis, TSB’s costs have increased by £42.1 million (+5.1%) to £869.5 million in 2022, driven by the £48.7 million fine concluding the joint FCA and PRA investigation into the 2018 migration programme, as well as higher conduct-related costs. However, TSB’s operating costs measured on a management basis reduced by £21.0 million (-2.6%) to £776.3 million despite inflationary pressures, reflecting continued progress in simplifying the business. Efficiencies have been made through reducing resource costs, lower property costs across the branch network, and reviewing supplier contracts.
  • TSB’s cost-to-income ratio (management basis) has improved by 11 percentage points to 70.4% (2021: 81.4%).
  • Credit impairment charges of £54.9 million increased significantly versus 2021 (£0.1 million), when the bank had exceptionally low charges following Covid-related impairment releases. The 2022 charge reflects the uncertain economic outlook and growing inflationary pressures for our customers. However, TSB is yet to see this translate to a marked increase in customers experiencing financial difficulties or missing payments.
  • Total customer lending increased £0.7 billion (+1.8%) to £38.1 billion in 2022. Core mortgages continued to grow despite management actions to manage volume in a highly volatile and competitive mortgage market. Lending balances were also impacted by increased mortgage repayments and early redemptions as customers sought to fix to new products ahead of maturity in the rapidly rising interest rate environment.
  • Customer deposits increased by £0.4 billion (+1.1%) to £36.3 billion reflecting strong growth in retail savings and, in particular, customers taking advantage of TSB’s competitively priced fixed rate products. This offset a reduction in current account balances, reflecting increased customer spending as the UK emerged from the Covid-19 pandemic, together with the higher cost of living.
  • The balance sheet remains resilient with a Common Equity Tier 1 ratio of 17.1% and Liquidity Coverage ratio of 195.8%.

Financial Results (unaudited):

Balance sheet and capital
(£ million)
At 31 Dec 2022 At 31 Dec 2021 Change %
Customer loan balances 38,050.0 37,383.8 1.8
Customer deposit balances 36,338.2 35,951.9 1.1
Group loan to deposit ratio 105% 104% 1pp
Common Equity Tier 1 capital ratio1 17.1% 15.8% 1.3pp
Financial performance
(£ million)
FY 2022 FY 2021  
Total income – management basis 1,102.8 980.0 12.5%
Operating expenses – management basis (776.3) (797.3) (2.6)%
Impairment losses (54.9) (0.1) n/a
Management profit before tax 271.6 182.6 48.7%
Migration related items2 (45.2) 9.7 n/a
Notable conduct charges (28.6) (2.2) n/a
Restructuring costs  (10.8) (29.0) (62.8)%
Bank volatility3 (3.5) (3.6) (2.8)%
Statutory profit before tax 183.5 157.5 16.5%
Net interest margin4   2.57% 2.44% 13bps
TSB asset quality ratio5 0.14% 0.00% 14bps

(1) Fully loaded basis.
(2) Comprises of regulatory fines of £48.7 million, and additional post migration costs of £2.4 million (2021: £0.6 million). These amounts were partially offset by insurance recoveries of £3.0 million (2021: £10.3 million) and a further migration related VAT recovery of £2.9 million (2021: £nil), received when the matter was finalised. 
(3)  Reflects net gains on derivatives partially mitigated by the use of hedge accounting, where relevant criteria are met, and volatility associated with share schemes. 
(4) Net interest income divided by average loans and advances to customers, gross of impairment allowance. 
(5) Impairment charges on loans and advances to customers divided by average loans and advances to customers, gross of impairment allowance. 

Business Performance Highlights

Despite the Covid-19 pandemic and the wider economic challenges that have followed, TSB’s 2019 growth strategy has been implemented in full, and the bank’s profitability has significantly exceeded the objective set out in the three-year plan.

For TSB’s next chapter, the bank has set out an ambitious plan to take forward its Money Confidence purpose. The strategy has four key elements, centred around customer focus, service excellence, simplification and efficiency, and doing what matters for people and the planet.

Customer Focus

  • TSB’s Fraud Refund Guarantee continues to lead the industry in protecting customers – with 97% of all cases refunded compared to the industry average of 56%. Four out of five (79%) fraud victims were refunded within five days or less.
  • TSB customers are enjoying the benefits of the Spend & Save account features, with over £36.5 million rounded up into Savings Pots using the ‘Save the Pennies’ feature on their current account. Active customers were rewarded with £1.3 million in cashback payments. And 630,000 customers opened a new savings account – more than double the previous year.
  • TSB helped 13,000 first-time buyers get onto the property ladder and supported over 30,000 customers switching to a new mortgage. TSB continues to deliver a leading mortgage service, with a broker trust rating of 87%, up from 72% in 2021.  
  • Over 2,400 colleagues have completed cost-of-living training and TSB has established early warning indicators to assist customers before they get into financial difficulty – including helping over 2,300 mortgage customers get back on track after struggling with payments. Over 40,000 customers most impacted by the cost-of-living crisis are contacted regularly offering support and signposting them to the dedicated Money Worries page on TSB’s website.
  • To support Britain’s small businesses, TSB introduced 30 months of free business banking for new customers and through its partnership with BankiFi and the new Revenu app, the bank’s small business customers have been helped to better manage their finances and get paid on time. 

Service Excellence

  • 93% of all service transactions were completed digitally in 2022, up from 91%. And three-quarters (75%) of all product applications were made through digital channels.
  • The TSB Mobile Banking app is now the sole digital channel for over two-thirds (67%) of customers – up by 9% year on year. A range of features have been introduced in the app including opening an account in under 10 minutes, ability to apply for loans, and switch on card controls.
  • Video banking capability has been expanded to include out-of-hours support for customers – with over 1,200 general banking appointments taking place by video each month. In addition to this, video banking accounted for 65% of all mortgage appointments last year.
  • TSB launched TSB Marketplace in the TSB Mobile Banking app to offer customers access to the bank’s partnership programme from their smartphones. TSB now offers a broader range of services through 13 fintech partnerships.

Simplification and Efficiency

  • A further 84 branches were upgraded in 2022, with nearly all of TSB’s branch network now refitted to serve customers better – creating more inviting spaces to engage customers, more self-serve deposit capability and video banking options. The branch network is complemented by over 40 ‘pop-ups’ serving communities across Great Britain, and TSB is an active participant in the Cash Access Group Banking Hubs programme.
  • A quarter of all fraud reports are now made by customers using TSB’s new online tools, giving customers the convenience of being able to report fraud 24/7.
  • TSB Smart Agent, an online chat facility, enabled over one million customer conversations and has been expanded to support vulnerable customers 24/7.

Doing what matters for people and the planet

  • In a UK first, TSB launched an ‘Emergency Flee Fund’ to provide TSB customers impacted by domestic abuse with a support payment between £50–£500 to help them pay for essentials when escaping abusive relationships.

  • TSB’s commitment to the prompt payment of suppliers was recognised with the Good Business Pays ‘Fast Payer Award’ for the second year in a row. TSB paid its small to medium suppliers in four days on average.

  • TSB was named in The Times’ Top 50 Employers for Women list, and 42% of senior roles at TSB are held by women, compared to an average of 36% across the industry. TSB also welcomed 17 new interns as part of the 10,000 Black Interns programme and is proud to be a signatory to the Black Talent Charter. 
  • TSB has reduced its operational carbon emissions by 73% compared to 2019 and submitted proposed targets to the Science Based Targets initiative (SBTi) for validation.


2022 was a challenging year for many of TSB’s customers, with inflation rising to a 40-year high in October. Inflation is expected to decline in 2023, though higher interest rates represent an additional headwind for borrowers.

As a result, the economy may slow further, bringing the risk of higher unemployment. House price inflation has fallen in recent months, and is projected to fall further in 2023, though forecasts suggest a relatively soft landing for the market.

Ongoing regulatory change across the industry requires TSB to consider new standards relating to consumer duty, the evolution of capital regulations, and expectations for corporate reforms through government consultations. TSB’s customer focus, high standards of governance and commitment to responsible business practice mean that the bank is well-placed to deliver on this to continue to improve outcomes for customers.

TSB continues to deliver on the ambitions of improving service, balance sheet growth, cost efficiency and profitability – with a relentless focus on its purpose of delivering Money Confidence for its customers.


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Notes to editors