TSB's profits tumble as high interest rates challenge mortgage sector
The firm, which is part of Spain's Banco Sabadell, reported a pre-tax profit of £111.6 million for the six months to June - down 24.5 percent against the same period a year earlier.
TSB, the high street lender, has disclosed a nearly quarter drop in profits for the past half-year due to a weak mortgage market. The bank, a subsidiary of Spain's Banco Sabadell, posted a pre-tax profit of £111.6 million for the six months to June, marking a 24.5 percent decrease compared to the same period last year.
TSB attributed this decline to a 6.1 percent fall in income to £548.7 million for the half-year. The bank cited lower mortgage margins due to "challenging" market conditions and high interest rates as factors impacting income, along with increased interest payouts to its savings customers.
This comes against a backdrop of UK interest rates at a 16-year peak of 5.25 percent, resulting in high mortgage rates. On Tuesday, TSB also reported "good progress" in its current strategy, which included branch closures earlier this year.
In May, TSB announced plans to close 36 branches and eliminate 250 jobs due to insufficient customer usage. In its latest update, TSB reported a £0.4 billion year-on-year decrease in customer deposits to £35.0 billion but noted a slight increase from the start of the half-year due to demand for key savings accounts.
The bank also revealed a £8.6 million reduction in credit impairment charges to £19.1 million for the period.
TSB's chief executive officer, Robin Bulloch, commented: "Our focus in 2024 is making TSB simpler and easier to bank with, and I'm delighted to see more customers choosing TSB."
"We continue to make good progress against our strategy and I'd like to thank everyone at TSB for their continued efforts to support our customers and communities, helping them feel more money-confident."
This comes as parent company Banco Sabadell has reported a bump in profits for the first half of the year.
