Tesco Bank customer numbers and profits up as group is rocked by record £6bn losses

Tesco_Bank_UseEdinburgh-based Tesco Bank has seen pre-tax profits rise by 10 per cent to £168m and its customer base grow to 7.4 million over the past financial year.

The challenger bank division of supermarket giant Tesco Group said profits were impacted by costs incurred on its expansion into mortgages and current accounts as wells as the setting aside of £27m, on top of £63m last year, to pay compensation to customers who were mis-sold payment protection insurance.

The latest data also revealed that lending rose by nearly 12 per cent to £7.7bn, while customer deposits were up nearly 14 per cent to £6.9bn.

The total number of customers rose by 5 per cent and income was up 3.2 per cent to £769m, helped by the strong lending figures.

It also introduced a 90 per cent loan-to-value mortgage, loans in the £1,000 to £3,000 range, and a mobile banking app.

The largely positive results will be welcome news for Tesco coming as they do on the same day that the retailer reported the worst results in its history with a record statutory pre-tax loss of £6.4bn for the year to the end of February.

That compares with annual pre-tax profit of £2.26bn a year earlier.

The result is the biggest loss suffered by a UK retailer and one of the largest in the country’s corporate history.

Around £4.7bn of the losses were the result of the fall in property value of its UK stores, 43 of which it said would close earlier this month.

The decline in the value of its property portfolio comes as a direct result of falling footfall in many of its out of town superstores.

Tesco’s chief executive Dave Lewis admitted it had been “a very difficult year for Tesco”.

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