TSB gained half a million new banking customers in 2014 and said it was in the market for acquisitions as it steps up its challenge to Britain’s big four lenders.
The business, a spin-off from bailed-out Lloyds Banking Group, won one in 12 of all new and switching bank accounts over the last year, equating to almost 500,000 new TSB accounts.
It is hoping to increase its share of all bank accounts to 6% from 4.3%.
Paul Pester, chief executive, would not be drawn on recent speculation that TSB was in talks with Aldermore about a potential takeover of the specialist lender, but confirmed TSB was open to deals.
“Our strategy is one of growth. We’re in the market, it’s just a matter of finding the right opportunity. We will look at a raft of things and see what makes sense,” he said. “If they are the right assets at the right price and they make sense for our shareholders, then we will look at them.”
TSB was spun off from Lloyds last June, and sees itself as a challenger bank to the four biggest players: Lloyds, Royal Bank of Scotland, Barclays and HSBC.
The bank has received over £300m of applications for its mortgage range, which was opened to brokers in January. TSB mortgages had previously not been available through brokers, which account for about 60% of UK mortgage deals. The lender said it expected to provide around £4bn of mortgages through brokers in 2017.
Mortgage rates have hit record lows in recent months as banks and building societies compete for market share and the Bank of England holds interest rates at a record low of 0.5%.
Pester said the market was competitive: “There are definitely some great rates out there in the market. This is a great time for customers to be thinking about fixing in for the medium term, and if interest rates rise they’ll be in a great position.”
TSB’s pre-tax profits doubled to £170m in the year to 31 December, boosted by a mortgage book transferred to the lender by Lloyds Banking Group as a part of the spin off, and a favourable pensions settlement with the bank.
Lloyds still has a 50% stake in TSB, which it must sell by the end of 2015. Shares in TSB have fallen 10% since their listing on the London Stock Exchange in June and slipped 0.6% to 259.6p on Wednesday.
Ian Gordon, banking analysts at Investec, said: “We continue to believe that TSB offers a ‘legacy free’ growth opportunity which is likely to prove more resilient than peers in the face of political change ... We regard TSB as a ‘defensive’, and the time to own such a defensive has, we think, arrived.”
TSB said it expected to spend to £720m in 2015, £30m less than it was previously guiding.
