TSB unveils new strategy to 'restore competitiveness'

The Bank has pledged to invest £120 million in digital solutions, products and services as part of the transformation programme.

Additionally, TSB plans to refresh its existing lending products, supported by new underwriting criteria.

TSB recorded a statutory loss before tax of £105.4m in 2018, largely due to IT issues faced in April 2018 when a planned upgrade to the Bank's systems sparked prolonged downtime to internet and mobile banking.

The Bank later admitted that 1,300 customers lost money as a result of fraud during the failures.

Costs relating to the IT failures totalled £330.2m over the year, including customer redress of £125.2m, fraud and operational losses of £49.1m, resource and advisory costs of £122.4m and foregone income of £33.5m relating to waived fees and charges.

As part of the new strategy, TSB expects to improve its profits from a breakeven position in 2019 to a profit after tax of around £130-140 million in 2022.

It is seeking 5% net lending growth per annum, a 15 percentage point improvement in cost to income ratio and £100 million in net cost savings by 2022.

Debbie Crosbie, CEO of TSB, said: "Our new strategy positions TSB to succeed in a challenging external environment at a time when we know customers want something different and better from their bank.

“With a trusted brand, modern platform, and national presence, TSB is well placed to deliver – but we need to make changes to enable us to compete.

“The plan we’re sharing today involves some difficult decisions, but it sets TSB up to succeed in the future. Taken together, these changes will help us to serve more customers, better, for the long-term.”

Jaime Guardiola, CEO of Sabadell, added: “TSB brings enhanced scale and broader geographical diversification to the Group, and is a key lever to improve our profitability going forward.

“The Strategic Plan we present today sets the stage for TSB’s future growth. TSB has a strong starting position and a well-defined plan to deliver all the commitments.

“I am very confident that TSB has the right team to deliver this plan and they have all the support from the Group.”