Government restrictions put in place to reduce the spread of the virus, lower overdraft income, reduced consumer spending and low interest rates resulted in its total income dropping by £90.1m to £894.8m.
Its net interest margin was also hit by low interest rates and Covid-19 customer support measures which saw it fall from 2.75 per cent to 2.47 per cent year-on-year.
The bank’s restructuring charges rose to £90.6m from £43.7m including a £55m provision for estimated charges relating to the fair treatment of customers in arrears.
Meanwhile, TSB’s total lending for the year increased 7.2 per cent to £33.3bn. The bank said this was driven by the Bounce Bank Loan Scheme and a growth in core mortgages, as it received over £10bn in mortgage applications for the first time last year.
Despite the “challenging” backdrop of an economic downturn caused by a low interest rate environment, Brexit and the continued impact of Covid-19, TSB said it was well positioned for the year ahead.
Debbie Crosbie (pictured), chief executive TSB, said: “TSB’s underlying performance is much improved. We’re ahead of plan in delivery of our strategy and have relaunched our brand, all of which sets us up well for the future. However, the impact of the pandemic and the additional cost of restructuring overshadows our financial result for the year.
“Throughout a challenging year, TSB colleagues excelled in supporting our customers and I want to thank all of them for their extraordinary service. Our priority going forward is our growth strategy, delivering exceptional customer experience and returning to profitability.”
