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TSB still too cheap

Maiden half-year figures from newly-floated lender TSB have underlined the bank's long-term growth potential
August 4, 2014

Maiden results from TSB revealed that underlying pre-tax profit fell £16m in the first half (compared with the second half of 2013) to £78.6m. But that's merely because the bank - which floated in June - no longer benefits from the economies of scale involved in being part of Lloyds (LLOY).

IC TIP: Buy at 286p

More significantly, TSB has begun life by grabbing business from its larger rivals: its market share for new account openings, for example, swelled to 9.2 per cent - well ahead of its 6 per cent target. Moreover, asset quality within the bank's low-risk mortgage-focused book looks good and the impairment charge fell 9 per cent half-on-half. The lender’s Basel III-basis core tier-one capital ratio also reached a hefty 28 per cent, leaving it with plenty of capital to support its planned loan book growth of 40-50 per cent by 2017.