![]() ![]() The balance sheet remains resilient with a Common Equity Tier 1 ratio of 17.3% (December 2022: 17.1%) and Liquidity Coverage ratio of 177.4% (December 2022: 195.8%). ![]() ![]() The contraction in deposits since the year end of £0.9 billion (2.5%) (December 2022: £36.3 billion) has been driven by current account customers moving funds to interest earning accounts as well as cost-of-living pressures. Year on year customer deposits have increased £162 million to £35.4 billion (June 2022: £35.3 billion) driven by customers taking advantage of TSB’s competitively priced savings products.Loans and advances to customers of £36.7 billion decreased by £1.2 billion (3.1%) year on year (June 2022: £37.9 billion) and by £1.3 billion (3.4%) compared to the year end (December 2022: £38.1 billion), reflecting lower customer demand in the rising interest rate environment, alongside management action to manage volume in a highly volatile and competitive mortgage market.Customer defaults are increasing but remain within expectation and below historic levels. The higher 2023 charge also reflects the uncertain economic outlook, increased interest rate environment and growing inflationary pressures for customers. Credit impairment charges increased by £9.8 million (54.7%) to £27.7 million (H1 2022: £17.9 million), as the prior period benefited from Covid-19 provision releases.Increases in people costs and marketing spend have been largely offset by reductions in property and fraud costs. Despite the inflationary pressure, we have only seen a small increase in operating expenses, of £3.2 million (0.8%) to £408.9 million (H1 2022: £405.7 million).Quarter 2 margin was 2.81% versus 2.86% in quarter 1. Year on year we have seen an increase in net interest margin to 2.84% for the 6 months to June 2023 (June 2022: 2.47%). The main driver was higher income which increased by £58.0 million (11.0%) to £584.5 million (H1 2022: £526.5 million) primarily reflecting the impact of the higher rate environment, partially offset by lower mortgage margins in a highly competitive market. ![]()
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