TSB back in the black in the first quarter

Profits at TSB Banking Group improved in the first quarter on the back of shifts in investment and marketing spend towards the fourth quarter of 2014.

Over the first three months of 2015 statutory profits before tax increased by 298.8% to reach £34.3m.

Given skewed investment and marketing spend in the fourth quarter of 2014 management profit before tax rose to £34.2m from £13.5m.

Franchise profit before tax turned into the black to reach £16.8m, after the £5.7m loss seen in the same three months of 2014.

In pro-forma terms the lender’s capital buffers on a CET1 basis edged higher to 19.8% from 19.7%.

TSB highlighted how it took a 7.9% share of all new and switching bank accounts in the last quarter, beating its own target for a 6% share for a fifth consecutive quarter.

In remarks to Digital Look a leading sector analyst in the City pointed out how the results had been flattered by lower marketing spend, although the performance of the new mortgage unit was promising.

Said analyst added that TSB's currently sub-scale loan portfolio, together with its fixed cost base, meant the lender could enjoy operating leverage going forward.

In the first three months of the year the bank received £700m of gross mortgage applications through the newly launched TSB mortgage broker service, which management described as a “flying start”.