TSB Banking’s Gains Market Share in New Checking Accounts

TSB Banking Group Plc (TSB) increased its share of new personal checking accounts to 9.2 percent in the second quarter, ahead of its target, as the company strives to challenge the dominance of Britain’s biggest four lenders.

TSB, carved out from Lloyds Banking Group Plc (LLOY) last month, said its share increased from 6.7 percent of new account openings in the first three months of the year, exceeding its target to consistently attract more than 6 percent, according to a statement today. Chief Executive Officer Paul Pester said the bank plans to open as many as 30 new branches in the next three-to-five years.

“We’ve started to see our strategy gain traction,” Pester told reporters on a conference call. “Customers, we think are voting with their feet.”

TSB, with about 631 branches, competes against the four-biggest banks, which have as much as 80 percent of the market. Lloyds sold 35 percent of TSB in an initial public offering on June 20 to satisfy European regulators after receiving a government bailout of more than 20 billion pounds ($34 billion) during the financial crisis.

The shares gained 1.4 percent to 286 pence in London trading. The stock has increased 10 percent since its IPO at 260 pence apiece.

Pester declined to comment on a Sky News report this month that said it may bid for about 1.5 billion pounds of mortgages owned by U.K. Asset Resolution, the holding company of Britain’s fully nationalized banks, including Bradford & Bingley and Northern Rock.

The bank’s first-half profit jumped to 128.5 million pounds from 36.1 million pounds in the year-earlier period, after the company made a 63.7 million-pound gain on the withdrawal from Lloyds’s defined-benefit pension plan.

Costs increased to 333.5 million pounds from 105.1 million pounds, reflecting additional expenses from operating as a separate company to Lloyds, TSB said.

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net

To contact the editors responsible for this story: Simone Meier at smeier@bloomberg.net Jon Menon, Keith Campbell

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