7th February 2025

TSB announces 2024 financial results

TSB reports a record statutory profit before tax of £290.4 million for 2024, an increase of £53.2 million (22.4%) from 2023. TSB proposes to pay a record dividend to its parent company, Sabadell.

Robin Bulloch, TSB’s Chief Executive Officer, said

“I am delighted that TSB has delivered another year of record results. We are confident that we can achieve our future growth ambitions through better supporting customers with their financial goals, while continuing to make the business fit for the future.

“I want to thank all my colleagues for their contributions over the past year and for the dedication they continue to show in serving our customers now and into the future.”

Financial Results for 2024

TSB is reporting a statutory profit before tax of £290.4 million for 2024, which is £53.2 million higher than 2023, and a record since returning to the high street in 2013. Post-tax, this translates to £207.9 million profit in 2024, an 18.9% increase year on year. The year-on-year increase is driven by lower operating expenses with a continued focus on cost efficiency in 2024, as well as lower impairment costs. This is partially offset by lower mortgage margins.
Income fell by 1.4% to £1,142.4 million (2023: £1,158.4 million), primarily reflecting the impact of lower mortgage margins in a highly competitive market, but partially offset by deposit margins and the growth in structural hedge income, as well as insurance recoveries of £36.2 million. Net Interest Margin (NIM) of 2.68% fell by 7bps in 2024. However, NIM has continued to improve throughout each quarter of 2024, alongside net interest income and profit before tax, and had increased to 2.77% in the Q4 period.
Operating expenses improved by 3.6% to £821.9 million in 2024 (2023: £852.9 million). 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.
Credit impairment charges fell to £30.1 million in 2024 (2023: £68.3 million), reflecting an improving economic outlook and a reduction in the risk associated with recent cost-of-living pressures, particularly for the unsecured portfolio. Secured impairment charges also benefited from both actual house price growth, and an improved outlook.
TSB has seen its cost-to-income ratio fall by 1.7 percentage points to 71.9% on a statutory basis for the year – with the impact of lower costs more than offsetting the reduction in income.
Total customer lending is £0.1 billion higher than 2023 (+0.2%), with core mortgage growth of £0.1 billion (+0.2%) – despite a challenging mortgage market. This reflects a stabilisation of the book following the previous year’s £1.5 billion mortgage balance decline. Application and new lending performance were also stronger in 2024, with year-to-date applications 13% higher than 2023 at £7.4 billion and new lending up 19% to £5.0 billion.
Customer deposits were £0.3 billion higher than the previous year (+0.8%). The key component of this was growth in savings balances (+3.2%) resulting from increased fixed-rate savings balances as customers moved their balances towards higher interest-earning savings accounts. Transfers to savings from current accounts slowed in 2024 as the interest rate environment has stabilised.
TSB’s balance sheet remains resilient with a Common Equity Tier 1 Ratio of 15.4% and Liquidity Coverage Ratio of 199.8%.
In light of the strong financial performance in 2024, TSB proposes to pay a dividend of £300 million to its parent company, Sabadell, subject to shareholder and regulatory approval. The dividend includes £200 million following the issuance of £250 million of Additional Tier 1 capital securities to Sabadell, in order to optimise TSB’s capital.

Financial Results

Balance sheet and capital (£ million)	At 31 Dec 2024	At 31 Dec 2023	Change vs Dec 2023
Loans and advances to customers	36,330.9	36,245.9	0.2%
Customer deposits	35,051.2	34,764.3	0.8%
Loan to deposit ratio	104%	104%	-
Common Equity Tier 1 Capital ratio	15.4%	16.7%	(1.3)pp

Financial performance (£ million)	FY 2024	FY 2023	Change vs 2023
Income	1,142.4	1,158.4	(1.4)%
Operating expenses	(821.9)	(852.9)	(3.6)%
Impairment losses	(30.1)	(68.3)	(55.9)%
Statutory profit before tax	290.4	237.2	22.4%
Tax	(82.5)	(62.4)	32.2%
Statutory profit after tax	207.9	174.8	18.9%
Net interest margin¹	2.68%	2.75%	(7)bps
Asset quality ratio²	0.08%	0.18%	(10)bps

1. Net interest income divided by average loans and advances to customers, gross of impairment allowance.
2. Impairment losses on loans and advances to customers divided by average loans and advances to customer, gross of impairment allowance.

Business Performance Highlights in 2024

Customer Focus

TSB customers opened more than 1.19 million products in 2024, including 244,000 new Personal Current Accounts and 756,000 new Savings Accounts. TSB Current Account customers were rewarded with more than £1.4 million in cashback payments.
TSB was recognised as a 5-Star Mortgage Provider at the Financial Adviser Service Awards for the fifth year running and the bank helped more than 7,600 first-time buyers get onto the property ladder in 2024. TSB also won the What Mortgage Awards for Best Direct Lender for the fourth year in a row and Best Fixed-Rate Lender for the fifth year in a row.
TSB’s unsecured lending in 2024 amounted to just over £840 million – 50% growth on 2023 performance.

Service Excellence

Over 91% of all TSB product openings in 2024 were completed by customers on digital channels, up from 84% in 2023. The TSB Mobile Banking app has been updated with a range of new features, making it easier for customers to organise their accounts, manage their transactions and apply for new products.
It’s also now even easier for TSB customers to get support through online chat, with over 1.7 million conversations taking place in 2024, up 44% compared to 2023.
TSB continued to meet the needs of more customers by expanding video banking services, with over 59,000 video appointments taking place in 2024 (over a quarter of which were out of hours).
The TSB Financial Support team for Mortgages won Best Contact Centre Culture (Small) at the National Contact Centre Awards and, in 2024, the bank contacted over 120,000 customers that were at heightened risk of falling into financial difficulty to offer extra support.

Simplification and Efficiency

TSB has the 7^th largest national network with 186 high-street branches, complemented by pop-up branches, and five TSB Pods – two of which are newly opened in 2024 in convenient locations in Workington and Torquay. TSB is also an active member of Cash Access UK, providing solutions such as Enhanced Banking Hubs and with a presence in 13 Banking Hubs in key areas across the UK.
Following a refresh in March 2024, the TSB website is now more responsive, modern and accessible for customers. TSB won Best Digital Accessibility Mission award at the Content Square Digital Experience Awards 2024.
Our highly-skilled colleagues continued to develop their expertise with over 1,200 colleagues taking part in Data and Digital training in 2024, completing over 8,400 learning modules in total.

Do What Matters

TSB continues to make strong progress against its Black, Asian and minority ethnic representation, with 18% across all colleagues (against a goal of 14%) and 11% in senior roles (against a goal of 10%). Additionally, 41% of senior leaders are female (against a target of more than 40%).
Through its Emergency Flee Fund, TSB supported more than 280 customers to escape from an abusive situation in 2024, with an average payment of £370 – over 50% of those fled with children.
TSB supported the implementation of the Carer’s Leave Act in April 2024, and received the ‘Best Overall Large Employer for Carers Support’ award from Carer Positive. TSB continues to go over and above the legislation and more than 3% of its workforce has taken up to 70 hours of paid leave to look after those they care for.
More than 1,000 TSB colleagues volunteered in 2024, including delivering Money Confidence workshops in schools to help almost 9,000 young people build their financial confidence.
In 2024, TSB set – and has now published – its science-aligned targets, a key milestone in its net-zero transition strategy.

Outlook

With inflation having fallen to more normal levels, the Bank of England cut the policy rate twice in the second half of 2024, to 4.75%. Market expectations have been unstable, but imply that the Bank Rate will remain higher than in the years preceding the recent rises.

Unemployment remained relatively low in 2024, and house prices increased – though UK economic activity softened in the second half of the year.

TSB’s Money Confidence purpose remains highly relevant and its robust capital and liquidity position means the bank is well-placed to continue its future growth ambitions and a positive profit trajectory.

- ENDS -

Media Contacts

Jennifer Powell, Head of Communications | 07483 918 573 | jennifer.powell@tsb.co.uk

Matthew Hepburn, Senior Media Campaigns Manager | 07483 431 309| matthew.hepburn@tsb.co.uk

Investors and analysts | investorrelations@bancsabadell.com

Notes to editors

TSB Banking Group plc's Annual Report and Accounts for 2024 are available on the website.