TSB hails current accounts gains

Peter Pester claims 'local banking model' success
Peter Pester claims 'local banking model' success
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BANKING group TSB said it had signed up one in ten of all ­customers opening new current accounts or switching in the UK in recent months.

But the lender, which floated in June and is 50 per cent owned by Lloyds, admitted the pace of customer growth was likely to fall back following its launch campaign.

Pre-tax profits for the third quarter to 30 September rose 28.8 per cent to £33.1 million.

Customer deposits grew by £500m to £24.2 billion over the three months but loans and ­advances shrank by £477m. The revived brand is suffering a ­decline in home loans as they will not be available through mortgage brokers until January.

Chief executive Paul Pester said the success in winning ­current account customers was evidence of “people continuing to vote with their feet for our local banking model”.

Pester said TSB was “probably now at base camp where it comes to growing our share of the current account market” but added the bank was “probably in the foothills when it comes to mortgages”.

He admitted the sluggish level of current account switching in the UK was putting the brakes on plans to grow market share from around 4.2 per cent to 6 per cent in the next four to five years, despite success in ­capturing the new business that was available.

Lloyds spun off the TSB business last year under European rules on state aid after it received a taxpayer bail-out during the ­financial crisis.

Its float raised £455m and a further share sale last month raised £161m.

Lloyds must dispose of its holdings in the business by the end of next year.