British bank TSB eyes deals after year profit edges up

* Pretax profit up 2.3 percent to 133.7 million pounds

* To consider acquisitions, no comment on Aldermore

* Mortgage broker service gets 300 mln pounds of applications (Adds detail on possible acquisitions)

By Aashika Jain and Matt Scuffham

Feb 25 (Reuters) - Britain's TSB Banking Group Plc said it would consider acquisitions to accelerate its expansion and reported a 2.3 percent rise in pretax profit for 2014 as it picked up customers from established rivals.

TSB would not comment directly on speculation it approached the owners of British banking newcomer Aldermore about a possible bid earlier this year.

The bank has also been linked with a possible purchase of mortgage portfolios from Britain's 'bad bank', which is winding down the loans of Northern Rock and Bradford & Bingley.

"If they are the right assets at the right price and they make sense for our shareholders, then we will look at them," Chief Executive Paul Pester told reporters on Wednesday.

British regulators are keen for new banks to challenge Britain's big four lenders -- Lloyds, Royal Bank of Scotland (LSE: RBS.L - news) , Barclays (LSE: BARC.L - news) and HSBC -- which provide three-quarters of the country's personal current accounts.

TSB, which became Britain's seventh biggest lender when hived off from Lloyds Banking Group last June, said it had taken an 8.4 percent share of all new personal current accounts opened over the past year with almost 500,000 new TSB bank accounts set up in 2014.

The bank wants to lift its share of the personal current account market to 6 percent from a figure of 4.2 percent when it listed on the London Stock Exchange (Other OTC: LDNXF - news) .

TSB said it had received more than 300 million pounds ($465 million) worth of applications to date for its mortgage range it opened to brokers in January.

Pretax profit rose to 133.7 million pounds for the year ended Dec (Shanghai: 600875.SS - news) . 31 from 130.7 million pounds in 2013.

Shares (Frankfurt: DI6.F - news) in TSB have fallen 10 percent since their listing on the London Stock Exchange. They were trading up 0.7 percent at 263 pence at 1325 GMT.

Lloyds sold a 38.5 percent stake in TSB through a stock market flotation of the business in last June followed by the sale of a further 11.5 percent shareholding in last September.

Lloyds was forced by European regulators to sell the 631 branches which now form TSB as a condition of receiving state aid during the financial crisis. It must sell the whole of TSB by the end of 2015 and is free to start selling more shares in the company from today, Wednesday. ($1 = 0.6450 pounds) (Reporting by Aashika Jain in Bengaluru and Matt Scuffham in London; Editing by Keith Weir and Louise Heavens)