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%.
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.