TSB profits get kicked as IT reboot goes on

Profits at TSB, owned by Sabadell of Spain, fell last year after IT costs spiralled upwards as the lender prepares to migrate the last remaining customers to its new computer system later this year.

The bank is still working to separate itself from Lloyds Banking Group’s IT system, despite having been spun off from the group in 2013.

Pre-tax profits fell £19.3 million to £162.7m in 2017, main- ly due to a £122m increase in outsourcing fees paid to Lloyds for using its former parent’s IT platform. TSB also warned that payments to Lloyds will continue and will lead to a reduction in profit before tax in 2018.

It came as the bank said it planned a £30m cash windfall for its circa 7,000 employees, a £2m rise on the award the previous year – and estimated to be worth about six weeks pay.

TSB said lending rose just under 5 per cent £30.9 billion and customer deposits were up 3.9 per cent at £30.5bn.