The bank said that its financial performance had been ‘significantly impacted’ by the coronavirus pandemic.

The news comes as TSB announced last week it would be closing 73 bank branches across the UK, with 300 jobs set to be lost.

TSB said the £90.1 million reduction in total income to £894.8 million (2019: £984.9 million) primarily reflects the adoption of government and regulatory measures in response to Covid-19, lower overdraft income from regulatory driven pricing changes, lower interest rates and reduced consumer spending.

The projected economic outlook resulted in a £103.5m increase in impairment losses to £164.0m (2019: £60.5m). The bank added that the £46.9m increase in restructuring charges to £90.6m (2019: £43.7 million) reflects an acceleration in the pace of branch transformation and changes to organisational design

One-off costs also included a £55.0m provision for estimated charges relating to the treatment of some customers in arrears.

TSB said its Net interest margin (NIM) of 2.47% (2019: 2.75%) was impacted by a lower mix of higher margin unsecured balances, COVID-19 customer support measures and lower interest rates.

However, the bank also reported hat its total customer lending at £33.3 billion increased by £2.2bn (+7.2%) driven by growth in core mortgages and business lending through the Bounce Back Loan Scheme.

At the same time, customer deposits at £34.4bn increased by £4.2bn (+13.9%) due to reduced customer spending and growth in business deposits as businesses maintained high levels of liquidity.

Debbie Crosbie, TSB’s chief executive, said: “TSB’s underlying performance is much improved. We’re ahead of plan in delivery of our strategy and have relaunched our brand, all of which sets us up well for the future. However, the impact of the pandemic and the additional cost of restructuring overshadows our financial result for the year.

“We achieved record levels of lending growth in 2020, including mortgage applications exceeding £10 billion in a year for the first time, and we continue to grow deposits. We have also made TSB more efficient, with underlying running costs lower than in 2019. Our balance sheet and capital position remain strong.

“The strategic advantage of our digital platform is evident in the way we are responding rapidly to customers’ needs, including the launch of a new current account, introducing leading mortgage products and improving the overall experience for our customers.

“Throughout a challenging year, TSB colleagues excelled in supporting our customers and I want to thank all of them for their extraordinary service. Our priority going forward is our growth strategy, delivering exceptional customer experience and returning to profitability.”