Tesco Bank H1 statutory group profit is down 19% year-on-year to £68m for the six months to end August.

Operating profit before exceptional items is up by 6% y-o-y to £89m.

Tesco Bank H1 exceptionals relate mainly to the £16m provision agreed with the FCA following an online fraudulent attack on Tesco Bank in November 2016.

In addition, Tesco is setting aside a further £7m for PPI claims.

Active customer account numbers are down by 1% year-on-year.  Growth in credit cards, loans and mortgages are more than offset by a decline in car insurance policies, reflecting a highly competitive insurance market.

Margin pressure results in a 20 basis point fall in net interest margin to 3.8%.

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Tesco Bank H1 Highlights

  • Lending balances are ahead by 12.8% y-o-y to £12.14bn;
  • Customer deposits are up by 13.2% y-o-y to £10.07bn;
  • Mortgage balances have increased by 38% year-on-year to £3.5bn and now comprise 29% of the Tesco Bank loans book;
  • Unsecured lending is up by 5.1% to £8.6bn, and
  • The cost-income ratio is down by 3.3 percentage points to 56.5%.

Group wide Tesco statutory pre-tax profit is ahead by 2.0% y-o-y to £564m.