TSB Lures Customers From High Street Rivals

The newly spun-off TSB bank has seen its pre-tax profit rise by 2.3%, as it lures customers from established high street rivals.

As a result, the company said it would consider making acquisitions in the future to help accelerate expansion plans.

TSB became Britain's 7th biggest lender after it was hived-off from the taxpayer-backed Lloyds Banking Group last June.

It says it now has 8.4% of all new personal current accounts opened in 2014, with the total almost reaching 500,000.

The bank said pre-tax profit rose to £133.7m for the year ending in December, up from £130.7m in the previous year.

Since its spin-off TSB has sought to position itself as one of the new breed of smaller "challenger banks", amid public discontent with the sector.

The bank said it hopes to lift its share of the total personal current account market to 6%, up from the target figure of 4.2% during the initial public offering (IPO) on the London Stock Exchange (Other OTC: LDNXF - news) .

Chief executive Paul Pester said: "2014 was a pivotal year for our business as we started to establish TSB as Britain's challenger bank.

"We've exceeded the expectations we set out at the time of our IPO in June last year."

Banking regulators have been supporting the new breed of bank on the high street as a way of offering greater competition to the overwhelming dominance of the four large lenders.

Meanwhile, new figures released by the British Bankers' Association show personal credit usage continuing to rise.

It said in January annual growth in personal loans and overdrafts was up 3.9% - the highest rate since late 2008.

But that was tempered by mortgage approvals, which were little changed in January compared with December, and still down a fifth on the figure from a year ago.