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TSB unveils new strategy for future growth

25th November 2019


Relentless focus on better serving customers and improving competitiveness

Key outcomes and financial targets in the 2022 strategic plan:

  • £120m investment to transform digital channels over next three years
  • c.5% net lending growth per annum
  • Profit target of £130 million - £140 million by 2022
  • Significantly improved efficiencies with 15 percentage point improvement in cost to income ratio and £100 million in net cost savings by 2022
  • Reduction in the branch network in response to changing customer behaviour with 82 branch closures in 2020

TSB’s CEO Debbie Crosbie outlined the Bank’s three-year strategy today to restore the Bank’s competitiveness through a relentless focus on better serving its customers.

TSB will invest £120 million in digital solutions, products and services that will help deliver its renewed business purpose - Money Confidence. For everyone. Every day.

The new purpose led strategy sets out a transformation programme for the Bank to become a simpler organisation to compete effectively, with deeper customer relationships and a better balance of customer channels.

Debbie Crosbie said: "Our new strategy positions TSB to succeed in a challenging external environment at a time when we know customers want something different and better from their bank.

“With a trusted brand, modern platform, and national presence, TSB is well placed to deliver – but we need to make changes to enable us to compete.

“The plan we’re sharing today involves some difficult decisions, but it sets TSB up to succeed in the future. Taken together, these changes will help us to serve more customers, better, for the long-term.”

Sabadell CEO, Jaime Guardiola said: “TSB brings enhanced scale and broader geographical diversification to the Group, and is a key lever to improve our profitability going forward.”

“The Strategic Plan we present today sets the stage for TSB’s future growth. TSB has a strong starting position and a well-defined plan to deliver all the commitments.

“I am very confident that TSB has the right team to deliver this plan and they have all the support from the Group.”


Underpinning TSB’s 2022 strategy are three key priorities:


1. Customer focus

TSB will deliver brilliant banking basics and compelling differences for its target segment, the “Aspiring Middle” – made up of working families, money balancers and variable income customer groups. These customers have a wealth of unmet needs and present clear opportunities where TSB can help make a difference.

These customers want a great digital experience but also a seamless personal experience – regardless of which channel they use. This will guide significant and ongoing investments in the channels that customers use the most to develop products, customer journeys and channels to suit the needs of the ‘Aspiring Middle’.


TSB will be more mobile and digitally focused, simplifying its customers’ experience by ensuring they have a distinctive ‘TSB experience’, with an easier to use service and more relevant products across all of the Bank’s channels. That means providing them a great digital experience but also a seamless personal experience – regardless of which channel they use.

  • To deliver the best customer experience, over c. £120 million will be invested to further build on TSB’s digital channels to provide mobile in-app onboarding / sales, as well as investing in the automation of some of the Bank’s branches.
  • TSB will refresh its existing lending products to provide new lending offerings, which will be launched to address a broader range of customers’ needs including, balancing finances and reducing unexpected worry. All of the Bank’s retail lending will be supported for the first time by new customer level decisioning / underwriting criteria.
  • The Bank will continue to invest in providing industry-leading solutions that genuinely matter to customers such as the Fraud Refund Guarantee, which protects TSB customers that are innocent victims of fraud.
  • TSB will reshape the size of its branch network to ensure it meets the changing needs of customers. TSB will also invest in self-service in branches and flagship branches, which will be in the right locations to meet customer demand and complement the focus on digital services.
    • TSB has conducted a detailed review and analysis of its current network, including its usage, proximity to alternative branches, the needs of vulnerable customers and the accessibility of alternative services such as free to use ATMs and the Post Office.
    • At present, TSB has more than double the UK average when comparing the number of branches per 10,000 customers (1.6 vs 0.8).
    • During 2020, TSB will close 82 branches, reducing its branch network from 540 to 454.
    • TSB will maintain a geographically dispersed branch network.
  • TSB will continue to invest in its business banking offer. The Bank already has market-leading offers of 25 months free banking, 1% interest rate on savings accounts; and it only takes 20 minutes to complete the business current account application process.

2. Simplification and efficiency

Becoming a more technology-enabled and innovative business means transforming to be simpler and faster. TSB’s new IT platform has a strong foundation to build upon for the future with multi-cloud and data capabilities, using data driven insights and analytics to improve customer experiences for its target segment.


  • Deliver enhanced functionality on TSB’s new mobile platform so that customers can access all services from TSB on the go.
  • Leverage open banking and the right third-party relationships to improve TSB’s unique offering to customers, encouraging innovation and collaboration with Fintechs and leading product providers. For example, TSB currently partners with Square to provide point of sale solutions to business customers.
  • Customer journeys will be transformed to make it simpler and easier for customers to do business with TSB using digital-led propositions and data-enriched experiences. For example, reducing time to open and start using a current account from 7 days to 10 minutes.
  • TSB will also give our customers the ability to complete transactions themselves in real time, expecting that by 2022 more than 90% of transactions will be self-service.
  • A digital led approach will mean three quarters of TSB’s customers will be digitally active over the next three years.
  • TSB will streamline head office functions and remove duplication becoming a more agile organisation with clear customer ownership. New ways of working will be introduced to empower employees to work in an agile way. Employees will also be trained with the skills to allow them to be digital and data connected.

3. Operational Excellence

TSB is focused on creating a resilient and sustainable business that delivers operational excellence. The strategy is underpinned by strong governance framework and oversight, backed by an experienced management team.


  • TSB is putting in place an operational framework that will enable the Bank to transition to a more competitive Bank that delivers efficiency through a strategy.
  • Conduct is at the core of the strategy and executive accountability for conduct and operational risk is clear. Conduct risk for all customer banking experiences, both business and retail, will be managed by the TSB Customer Banking Director and operational risk under the Chief Operating Officer.
  • We are transitioning away from a diverse range of suppliers managed on our behalf by Sabis to take direct control in the UK with clear accountability by our Chief Operating Officer.
  • IT transformation programme focused on stability and cybersecurity.
  • Strong underwriting principles will underscore product and service development.
  • Prudent capital and liquidity management.

Financial returns and targets

The key financial outcomes delivered by the strategy (2019-2022) are as follows:

  • TSB will deliver net cost efficiencies, after absorbing the impacts of amortisation from investment, of around £100 million, which will also drive an anticipated improvement of 15 percentage points in its cost-to-income ratio.
  • TSB will continue to grow and diversify its lending book with c.5% net lending growth per annum.
  • Over the course of the plan to 2022, TSB will incur branch and restructuring charges of around £180 million.
  • In 2022, we expect TSB profits to improve from the current broadly breakeven position in 2019 to a profit after tax of around £130 million - £140 million in 2022. At these levels, TSB’s underlying Return on Equity will be around 7%.
  • TSB has a robust funding plan to support growth while maintaining a low cost of funds and a strong liquidity position.

***Media conference call***

Debbie Crosbie, TSB’s Chief Executive Officer, and Ralph Coates, TSB’s Chief Financial Officer, will hold a media conference call at 1.15 pm today.

Conference call details: 020 3936 2999
Participant pin: 133773


Media Contacts


For further information please contact:

George Gordon, Communications and Corporate Affairs Director
0207 003 9369 |

Supreet Thomas, Head of Communications
07519 502 123 |

Investors and analysts:


Notes to editors


  • Locations of branch closures will be announced on 28 November after TSB’s impacted employees are informed.
  • Please find attached a summary of the investor presentation.
  • In November 2019, TSB has 540 branches. TSB had already announced four closures before the end of 2019 and will be closing 82 branches in 2020. At the end of 2020, TSB will have 454 branches.