TSB announces 2018 full year results

While last year was TSB’s most challenging year, the Bank enters 2019 with a modern platform set up to serve more customers in more communities than ever before.

Today, 1 February 2019, TSB announces its financial results for the year to 31 December 2018:

• TSB’s statutory loss before tax for 2018 was £105.4 million, against a profit of £162.7 million in 2017, reflecting the impact of the issues following the Bank’s IT migration.
• In total, TSB has recognised post-migration costs, including customer compensation, additional resources, fraud and foregone income of £330.2 million, partially offset by the provisional recovery of £153.0 million from TSB’s IT provider, Sabis.
• At 31 December 2018, TSB’s total customer lending was £30.0 billion and total customer deposits stood at £29.1 billion.
• Common Equity Tier 1 capital ratio and liquidity coverage ratio remained very strong at 19.5% and 298.1% respectively, with the loan to deposit ratio at 103.2%.
• Around 140,000 customers opened a new bank account or switched their account to TSB in 2018.
• Around 80,000 customers switched their bank account away from TSB in 2018 with volumes peaking in Q2; this compares with around 50,000 customers switching their account away from TSB in 2017.
• TSB now has 3.8 million current account customers and over five million customers in total.

TSB has continued to make good progress on its three priorities announced in September 2018:

1. Completing the work of putting things right for customers:

• TSB has resolved around 90% (181,000) of the 204,000 customer complaints received since migration. TSB estimates approximately a quarter of this total would have been received in the usual course of business.
• New complaints being received are significantly lower in volume and closer to pre-migration levels, with the majority no longer connected to migration issues.

2. Enabling the Bank to achieve full functionality for customers, including availability of all product services and the launch of a leading business banking offer:

• All critical and urgent IT fixes have been applied, IT services are now stable within the range of industry performance, and the majority of products are available across all channels.
• In December, TSB was named as part of the Incentivised Switching Scheme for SMEs, and the Bank is bidding for a grant from the Capability and Innovation Fund.

3. Appointing a Chief Executive for the next chapter of TSB:

• In November, Debbie Crosbie was announced as CEO designate¹ and she joins the business in Spring 2019.

• To recognise the exceptional team effort across the business to put things right for customers, the Board awarded TSB Partners (excluding Executives) £1,500 each in December.
• The Board has decided that no other bonuses will be paid for 2018.

Looking ahead to 2019:

• TSB’s new IT system provides a coherent architecture involving significantly fewer platforms with improved and faster service for customers and Partners.
• Current accounts can now be opened in branch in half the time compared with the old system, and online current account openings have returned to underlying pre-migration levels following the launch of an improved online application.
• Mortgage brokers can also submit applications in half the time compared with the old system; TSB has already started to see the benefit with the busiest ever week in the Bank’s history for mortgage applications in December 2018.
• The Bank is committed to strengthening its support for small and local businesses right across Britain with a multi-million-pound investment programme underway to build new banking services for small businesses.

Richard Meddings, TSB Executive Chairman, says: “Last year was TSB’s most challenging year. But we enter 2019 with renewed ambition to re-emerge as the leading challenger bank in the UK – firmly on the side of the customer. We have a truly customer-focused team, a strong banking system that customers are starting to see the benefits of, and look forward to our new CEO, Debbie Crosbie, joining us later this year.

“In addition to continuing to improve our offer for consumers, we are going to make a significant move into business banking. We have a multi-million-pound investment programme underway to help us grow our business banking offer across every town and city we serve – as the only challenger bank with a nationwide branch network, and we were named in December as part of the Incentivised Switching Scheme.

“Whilst the migration caused considerable difficulties, we’re now a stronger bank, operating on a more coherent and modern platform, and able to service more customers than ever before. Helping local communities and businesses to thrive is just one element in being an essential part of the fabric of communities and their high streets – along with creating jobs, tackling fraud, and helping those in need through our charity partnerships.

“At a time when some banks are quietly retreating from communities, we’re proud to support local customers and businesses through our branches across the country, alongside digital and telephone banking.”