TSB share price: Company updates on FY performance

on Feb 25, 2015
Updated: Oct 21, 2019
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TSB Banking Group Plc (LON:TSB) has this morning updated investors on its full-year performance. Here are the highlights from the company statement with more to follow:

Chief Executive Officer’s statement
TSB made a strong start to life as an independent listed business in 2014. We delivered financial performance that, on balance, exceeded our expectations and we made a strong start in the delivery of TSB’s growth strategy. We delivered a profit of £133.7 million in 2014, of which just over half was generated by the Mortgage Enhancement portfolio. Deposits increased to £24.6 billion, a strong testament to the strength of the TSB model and brand in attracting bank accounts and deposits. Meanwhile, as expected, our Franchise customer lending fell to £18.8 billion in 2014 as TSB mortgages had not been available through intermediaries who represent c.60% of the UK mortgage market.

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We have clear headroom for future growth, with our Franchise loan to deposit ratio falling to 76.5% and our Pro forma Common Equity Tier 1 ratio at almost 20%, making us one of the strongest capitalised banks in the UK.

TSB’s Franchise margin remained broadly flat at 3.62% despite lending margin and low interest rate pressures, while the benign economic environment resulted in the Group AQR falling to 44 basis points.

2015 outlook
We expect:
– To consistently attract a greater than 6% share of gross flow of all switching and new personal bank accounts through 2015; – The balance of Franchise net lending to increase by around £1.5 billion in 2015, with net growth from mid-way through the year; – To meet these growth targets while controlling costs to no more than £720 million in 2015; – The Franchise net interest margin to be broadly flat in 2015, with a positive start offset by subsequent compression; – Franchise other income to fall by c. £15 million primarily driven by lower interchange income.
As of 07:06 GMT, Wednesday, 25 February, TSB Banking Group PLC share price is 261.20p.

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