After rising interest rates pushed the bank’s annual profits to an all-time high, TSB’s 5,700 employees and executives will share a massive 10% bonus pot this year.
While most of the staff members are paid bonuses worth 11.8% of their pay compared to 10.2% last year, the high street lender stated that the pool has increased from £27m distributed a year earlier to £29.8m.
Robin Bulloch, the chief executive of TSB, will receive a bonus of £782,000, almost matching his salary of £875,000, for a total of almost £1.8m for 2022. Bulloch took over the reins as chief executive the previous year in April when Debbie Crosbie resigned and joined Nationwide.
Due to a large-scale IT meltdown in 2018, the bank now has annual profits of £182.5m for 2022, up 16.5% due to rising interest rates, allowing it to charge its customers more on loans and mortgages.
It’s worth noting that, despite being charged a hefty fine of £48 million in December for the disastrous IT migration that locked out millions of banking customers for weeks in 2018 and forced its then-CEO, Paul Pester, to resign, the bank still managed huge profits, and payouts have increased.
While deciding the employee bonuses, the TSB’s pay committee included the fine imposed by the Financial Conduct Authority.
The rise in lending and interest rates was contributing to the strong performance, but the executive also stated that a three-year turnaround plan, sweeping cost cuts, and nationwide branch closures were also responsible for it.
According to Bulloch, the bank was preparing for potential economic chaos because it had yet to see signs of critical financial agony from its customers, such as a 10% decrease in the cost of housing this year compared to 2022.
“Obviously, we are operating in a very uncertain environment,” Bulloch conveyed. “And for anyone in a job like this in recent years, it’s been challenging to make accurate predictions about the UK economy. But one thing I do have huge confidence in … is that we stand ready to support our customers through this period.”
As of now, the bank is all set to pay a dividend to Sabadell, its Spanish owner, for the first time since TSB was acquired from Lloyds for £1.7bn in 2015.
The £50 million settlement is expected to put an end to rumors that TSB would be sold again in the future. Following the IT breakdown in 2018, which caused a pre-tax loss of £105.4 million, Sabadell was said to be considering a sale in 2020. To examine the company, Sabadell recruited Goldman Sachs.
After rejecting a £1 billion offer from the Co-operative Bank in November, Sabadell now seems to have changed its mind.
“Sabadell have been crystal clear they have no plans to sell TSB and in fact, I think they are looking at the results we’re delivering with great pride,” Bulloch stated. “They’ve been unequivocal around this position, which is that they see TSB as an integral part of Sabadell.”
- Published By Team Timeswire