TSB earnings spike ahead of Santander takeover

TSB Bank has revealed its earnings spiked by more than a third this year as it prepares to be taken over by Santander for £2.9 billion.

The bank said its financial performance had improved despite consumers remaining cautious amid rising inflation and weakening economic growth.

It reported a pre-tax profit of £270.6 million for the first nine months of 2025.

This was 38.2% higher than the £195.8 million it made in the same period last year.

Operating expenses fell by 7.5% year on year, driven by efforts to reduce business costs and “simplify” the bank.

The earnings growth will come as good news to TSB’s future owner Santander, which struck a deal with the bank’s parent firm Sabadell for a takeover.

The deal valued TSB at £2.65 billion but the sale price is estimated to rise to £2.9 billion once the transaction completes, which is expected to be early next year.

Santander said acquiring TSB would help it be more profitable in the UK.

It plans to integrate the brand into its group, which raised concerns about job cuts and branch closures across the combined bank.

TSB, which is the 11th largest bank for mortgages in the UK, said it had been a “challenging lending market” during the year.

Total customer lending was broadly flat year on year, but mortgage applications rose by 9%, it said.

Savings balances edged higher but this was partly offset by increased spending from current accounts and higher tax payments for business customers.

“UK consumers remain cautious yet resilient in an uncertain economic environment,” the bank told investors.

“Inflation has increased slightly in 2025 and economic growth weakened in the second half of the year, but the housing market remains stable and interest rates are showing a gradual reduction.”

TSB also said it helped more than 275 people escape from an abusive situation over the first nine months of 2025 through its emergency flee fund.

The fund was launched three years ago and gives domestic abuse victims up to £500 to pay for essentials, without the need for it to be paid back.