News

TSB reports drop in first half year profits

TSB Banking Group, which is in the process of being sold to Spanish bank Banco Sabadell, has reported that its first-half year profits have slumped by 44%, allegedly caused by a lower average of loan balances and recognition of a full-year Financial Services Compensation Scheme levy charge.

The new tax on banks was introduced by George Osborne’s emergency budget, designed partly to replace the bank levy, a tax on global balance sheets of the biggest banks, which has led to discontent in the industry and even the possibility of giant banks like HSBC leaving the UK.

According to the Financial Times, pre-tax profits for TSB in the six months to June were £44 million, down from 20.1% for the six months to December. The bank said it recognised a full-year FSCS levy charge of £14.8 million during the period.

Sky News has reported that the £1.7 billion takeover by Sabadell is on course to be completed as soon as Sabadell, under City rules, moves to buy out the remaining TSB shareholders who were yet to consent to their holdings being sold.

British lawmakers and regulators want to establish more competition in this sector, by breaking the dominance of Lloyds, Royal Bank of Scotland, Barclays, HSBC and the UK arm of Spain’s Santander, which together control more than four out of five personal current accounts in Britain.