£111m coronavirus hit pushes TSB into the red
TSB swung to a loss in the first six months of the financial year after taking a big hit from loans it expects to go bad, as coronavirus causes waves in the economy.
The bank said it had taken a £111 million impairment across the six months as the economic outlook weakened.
It pushed TSB to a pre-tax loss of £65.5 million for the half, a year after making a £21.1 million profit.
Banks have in the last week been writing off billions of pounds of loans they suspect will turn bad, citing the economic conditions brought on by coronavirus.
TSB highlighted the slow housing market and rising unemployment as two major threats.
Lockdown has been bad in many ways for banks, but as people switched to doing things from home, they also helped accelerate TSB’s online growth.
Nearly three times as many customers are signing up for its mobile bank app every day than before lockdown.
More than nine in 10 transactions were processed through digital or automated channels in June, while more than 70% of sales were online.
Around 3,500 TSB employees have been working from home during lockdown, and the company has filled 80 of its 100 new roles at the IT department in Edinburgh.
TSB has been pushing to improve its IT systems after a 2018 outage that locked two million people out of their accounts and damaged confidence in the lender.
Chief executive Debbie Crosbie said: “We had a strong start to the year, but the external environment changed significantly when Covid-19 struck.
“We’ve benefited hugely from the technology platform we now have in place at TSB, enabling us to accelerate our digital offer for customers when they needed us most.
“Despite the challenging context, our balance sheet and capital position remain strong, we have improved efficiency in our operations, and our purpose to help people increase their money confidence has never been more relevant.
“I’m particularly proud of how TSB colleagues have responded, learning new skills, taking on new responsibilities, demonstrating real resilience, and above all putting customers first – showing TSB at its best.”