TSB calls for help from regulator after profits and customers surge


Challenger bank TSB has called on regulators to use the "full force of competition" to help it break the stranglehold of the Big Five banks in the UK as it posted a surge in profits and new customers.

Paul Pester, chief executive of TSB, said the lender was "doing its bit" to increase competition in high street banking, attracting more than 1,200 new customers a day in the first quarter - up 25% year-on-year.

But he said the Competition and Markets Authority (CMA), which is nearing the end of a two-year inquiry into UK retail banking, needed to do more to promote switching and make charges clearer.

He said: "We need the CMA to use the once-in-a-generation opportunity they have to help us bring the full force of competition to bear on the UK banking market."

His plea came as the group - spun out from Lloyds Banking Group and then taken over by Spanish rival Banco de Sabadell last March - posted a 53.4% year-on-year hike in bottom-line profits to £52.6 million in the first three months of 2016.

On an underlying basis, management pre-tax profits rose 75% to £59.9 million.

TSB said it notched up record growth in customer savings deposits, up £2.1 billion year-on-year to £26.8 billion in the first quarter and a £900 million or 3.5% rise on the previous three months.

Mr Pester said the results showed the group was making good strides in taking on its big rivals - Barclays, Lloyds, NatWest, HSBC and Santander - but added "we can't do this alone".

He said: "We want all bank customers to know what they're paying for their banking; all customers - including overdraft users - to be able to switch easily; and all customers to be aware of their right to switch banks.

"Only then will competition really start to work and the culture of UK banks finally shift to serving customers on their terms - rather than on the banks'."