TSB Bank’s profit rockets from stamp duty rush and cost-cutting
TSB Bank’s cost-cutting plans and a rush to beat the stamp duty deadline imposed by Chancellor Rachel Reeves helped bolster profits in the first quarter.
The Edinburgh-headquartered lender increased profit before tax to £101.3m for the first three months of 2025 – an 89 per cent jump from £53.4m in 2024.
Operating expenses fell 4.7 per cent to £195m as the bank continued its 2024 commitment to cost control and efficiency initiatives.
The lender said total customer lending grew by £100m to £36.4bn from the 2024 year-end.
The firm recorded more than 1,900 first-time buyers after it extended its mortgage range offerings on new builds and shared ownership properties.
Secured lending—where the borrower provides an asset that the lender can claim if the borrower defaults—was up 12 per cent from the first quarter of 2024 to £1.5bn.
TSB’s income jumps on higher structural hedge
TSB followed a trend set out by its FTSE 100 peers in strong interest rate performance.
Income jumped 14.4 per cent to £312.9m, which the firm said was driven by higher structural hedge, as well as some undisclosed one-off items.
TSB’s net interest margin—a key metric for banks’ profitability from lending—swelled by 13 basis points to 2.89 per cent in the final quarter of 2024. This marked an increase of 28 basis points from the same period last year.
Marc Armengol, TSB’s chief executive, said: “TSB has delivered an exceptional performance in the first three months of 2025 and continues to make an increasing contribution to Sabadell Group.
“It is encouraging to see margins improving and costs continuing to reduce, alongside the benefit of some one-off items.”
The bank’s strong first-quarter performance comes as its parent company Sabadell fends over takeover threats from Spanish banking giant BBVA.
BBVA, Spain’s second largest bank, has eyed an acquisition of Sabadell and lodged several offers with the lender.
After Sabadell rejected takeover proposals, BBVA initiated a hostile takeover last May, taking a €12.2bn (£10.5bn) all-share merger proposal for Sabadell directly to shareholders. The offer valuesd the bank’s shares at €2.13 (£1.93) each.
Sabadell has continued to shun offers from its rival leading to the Spanish government opening a public consultation over the proposed acquisition. The consultation is set to close on May 16.