The chief executive of TSB, the challenger bank taken over by Spain’s Sabadell for £1.7bn, has called on the Chancellor to alter the 8 per cent bank profit surcharge he announced in the Budget.
“We are the challenger bank with the sharpest teeth and we don’t want to see those teeth blunted,” Paul Pester said.
“Replacing the bank levy with a tax levy makes sense. But the £25m profit cut-off should be increased because that helps the very, very small challengers but not those with critical mass like ourselves, Virgin Money, Clydesdale and even Williams & Glyn.”
George Osborne has said he wants to encourage “challenger” banks to break the dominance of the big five banks in the UK. More than four out of five current accounts in the UK are currently with Lloyds Banking Group, Royal Bank of Scotland, Barclays, HSBC or the British arm of Santander.
TSB was carved out of Lloyds last year, while Williams & Glyn is being spun off by RBS. Mr Pester also welcomed an announcement from the Financial Conduct Authority to make the savings market more transparent, including a minimum seven-day switching for cash ISAs.
He hopes the Competition and Markets Authority could order similar changes to the current accounts market.
TSB’s first-half headline profit fell from £55.1m to £44m as its re-entry into the mortgage market through brokers saw a jump in lending but a delay to when the related extra income starts flowing.
Metro Bank grew its customer base by 10 per cent, or 49,000 people, in the past three months. Total savings rose 94 per cent year-on-year to £3.8bn while lending rose 90 per cent to £2.2bn.
