TSB profits up by fifth ahead of Santander swoop: future of historic name unclear
“Our record financial performance was underpinned by the committed, collective effort of my colleagues” – Marc Armengol, CEO
Scottish-founded high street bank TSB has seen its full-year profits jump by more than a fifth as it awaits completion of its near-£3 billion takeover by Spanish group Santander.
TSB, formerly the Trustee Savings Bank, was founded by the Reverend Henry Duncan in Dumfriesshire in 1810. It retains a Scottish headquarters in the centre of Edinburgh.
The bank said its pre-tax profits had risen 20.7 per cent to £350.4 million for 2025 as costs fell and its income rose, but loans to customers dipped 0.2 per cent to £36.3 billion amid a “challenging lending market”.
TSB announced late on Thursday that chief executive Marc Armengol will step down to head up its current Spanish owner, Sabadell. The move is set to coincide with TSB being bought by its bigger rival Santander, which the firms expect to happen during the first half of this year, with Armengol taking on the new job after May.
Armengol said 2025 was an “extraordinary year for TSB” and praised a “record financial performance”. It remains unclear if the historic TSB brand will be kept on after the takeover by Santander, with its Spanish-owned buyer yet to make up its mind.
The deal valued TSB at some £2.65bn but the sale price is estimated to rise to £2.9bn once the transaction completes, which is waiting for regulatory approval. There are also fears over job cuts and further branch closures across the combined group after the deal.
Santander last week said it was closing another 44 branches across the UK, which will leave it with 244 full branches before the TSB integration.
At present, TSB, which ranks as the UK’s 11th largest mortgage lender, has about 175 branches across the UK and employs more than 5,000 people. It said operating expenses reduced by 4.4 per cent to £786m last year thanks to a tight rein on costs and efforts to streamline the business.
The group said customer deposits remained largely flat, up 0.5 per cent to £35.2bn, though fixed-rate deals helped savings balances rise 2.3 per cent.
In its results statement, TSB said: “UK consumers remain cautious, yet resilient, in an uncertain economic environment.
“Unemployment increased in 2025 and economic growth has weakened, but the housing market remains stable and lower inflation is expected to pave the way for further base rate cuts in 2026.”
Armengol said: “2025 was an extraordinary year for TSB. Our record financial performance was underpinned by the committed, collective effort of my colleagues: stepping up to ensure we stay truly competitive, deliver money confidence for our customers, act responsibly and run the bank more efficiently.”
The bank’s cost-to-income ratio fell by 5.5 percentage points to 66.4 per cent in 2025, compared with 71.9 per cent in 2024, reflecting “continued cost management discipline and income improvements while remaining focused on delivering for customers”.
TSB’s latest figures come amid a busy period for banking results, with NatWest due to report on Friday February 13.
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