TSB saw pre-tax losses of £204.6 million last year, compared to £46 million profit in 2019.

According to the UK retail and commercial bank, its financial performance was significantly impacted by the coronavirus pandemic.

The bank’s latest financial results show a £90 million reduction in total income to £894.8 million, which the company said reflects government restrictions in response to the pandemic, alongside lower overdraft income from regulatory driven pricing changes, lower interest rates, and reduced consumer spending.

The projected economic outlook resulted in a £103.5 million increase in impairment losses to £164.0 million, compared to just £60.5 million in 2019.

The bank said that the £46.9 million increase in restructuring charges to £90.6 million in 2020, compared to £43.7 million in the previous year, “reflects an acceleration in the pace of branch transformation and changes to organisational design.”

It explained that one-off costs also include a £55.0 million provision for estimated charges relating to the treatment of some customers in arrears.

The results show that total customer lending at £33.3 billion increased by £2.2 billion (+7.2 per cent) driven by growth in core mortgages and business lending through the Bounce Back Loan Scheme.

They also reveal that customer deposits at £34.4 billion increased by £4.2 billion (+13.9 per cent) due to reduced customer spending and growth in business deposits as businesses maintained high levels of liquidity.

TSB’s chief executive Debbie Crosbie said that the bank’s underlying performance had improved significantly.

“We’re ahead of plan in delivery of our strategy and have relaunched our brand, all of which sets us up well for the future,” said Crosbie. “However, the impact of the pandemic and the additional cost of restructuring overshadows our financial result for the year."

She explained: "We achieved record levels of lending growth in 2020, including mortgage applications exceeding £10 billion in a year for the first time, and we continue to grow deposits. We have also made TSB more efficient, with underlying running costs lower than in 2019. Our balance sheet and capital position remain strong.”

The TSB CEO said that the strategic advantage of the bank’s digital platform is evident in the way it can respond quickly to consumer demand, including the launch of a new current account and introducing leading mortgage products.

"Throughout a challenging year, TSB colleagues excelled in supporting our customers and I want to thank all of them for their extraordinary service. Our priority going forward is our growth strategy, delivering exceptional customer experience and returning to profitability," added Crosbie.

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