TSB has posted a statutory pre-tax loss of £204.6m for 2020, compared with a £46m profit in 2019, in a results update that admits its performance was “significantly impacted by the Covid-19 pandemic.”
The lender said a £90m drop in income to £895m primarily reflected the adoption of government and regulatory measures in response to Covid-19, lower overdraft income from regulatory-driven pricing changes, lower interest rates and reduced consumer spending.
One-off costs last year also included a £55m provision for estimated charges relating to the treatment of some customers in arrears.
Due to the impact of Covid-19 and lockdowns, the projected economic outlook for TSB has resulted in a £103.5m increase in impairment losses to £164m, compared with just over £60m in 2019.
The lender also saw a £46.9m increase in restructuring charges to more than £90m, reflecting what TSB called an acceleration in the pace of branch transformation and changes to organisational design.
Debbie Crosbie, TSB’s chief executive, said: "TSB’s underlying performance is much improved. We’re ahead of plan in delivery of our strategy and have relaunched our brand. However, the impact of the pandemic and the additional cost of restructuring overshadows our financial result for the year.
"We achieved record levels of lending growth in 2020, including mortgage applications exceeding £10nn in a year for the first time, and we continue to grow deposits.
"The strategic advantage of our digital platform is evident in the way we are responding rapidly to customers’ needs, including the launch of a new current account, introducing leading mortgage products and improving the overall experience for our customers.”