TSB posted new home loans up 19% to £5bn last year compared to 12 months ago, despite operating on “lower mortgage margins in a highly competitive market”.
The UK bank, owned by Spanish parent Sabadell, added that mortgage applications are 13% higher year-to-date at £7.4bn in its annual report.
TSB chief executive Robin Bulloch said: “The mortgage market remains very competitive, with squeezed margins impacting providers.
“However, we saw stronger mortgage performance in the second half of the year, and through 2024 we have helped 7,600 first-time buyers take their first step on the property ladder.”
The lender added: “With higher interest rates and strong competition in the market, customers are shopping around for the best deal to mitigate the impact of rising mortgage costs.”
The bank’s total mortgage loan book stands at £34.1bn, unchanged from a year ago.
Its net interest margin – the difference between what it writes in loans against what it pays out to customers in interest — fell 7bps to 2.68% in 2024.
Overall, the lender posted a pre-tax profit up 22.4% to £290.4m for the period, boosted by lower impairment losses, which plunged by 55.9%, operating expenses that were 3.6% lower and “an improving economic outlook”.
TSB added: “With inflation having fallen to more normal levels, the Bank of England cut the policy rate twice in the second half of 2024, to 4.75%.”
The Bank of England cut interest rates further by 0.25% to 4.5% yesterday.
TSB continued: “Market expectations have been unstable, but imply that the Bank rate will remain higher than in the years preceding the recent rises.
“Unemployment remained relatively low in 2024, and house prices increased – though UK economic activity softened in the second half of the year.”
