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PRIVACY
Professional Services

Cost-cutting pays dividends for TSB as bank reports record year

TSB's pretax profit increased to £290.4m, 22 per cent higher than the year before and a record since the bank returned to the high street in 2013

TSB's cost-cutting measures have enabled the bank to weather a "competitive mortgage market", as the high street lender reported a record-breaking year.

TSB's pretax profit rose to £290.4m, a 22 per cent increase from the previous year and a record since the bank's return to the high street in 2013, as reported by .

This was achieved despite a slight drop in income to £1.1bn from £1.2bn in 2023, which the bank attributed to "lower mortgage margins in a highly competitive market". The profit boost was due to reduced costs.

TSB reported that operating expenses had decreased by 3.6 per cent to £821.9m, down from £852.9m the previous year.

"A continued focus on costs and lower restructuring costs helped to mitigate the impact of higher inflation, one-off costs and the new Bank of England levy," it stated.

Credit impairment charges also dropped by 44 per cent to £30.1m, reflecting an improving economic outlook and lower risk from its unsecured portfolio as cost-of-living pressures ease.

The bank’s net interest margin (NIM) fell by seven basis points to 2.68 per cent compared to 2023, although margins actually improved throughout each quarter in 2024.

NIM measures the difference between what banks pay on deposits and what they earn from loans and other assets. By the fourth quarter, the bank’s NIM stood at 2.77 per cent.