Increased competition and low interest rates will continue to hit profit at TSB (LON:TSB), the Lloyds spin-off warned today.
Interim profits fell 44% to £23.2mln in the six months to June, down from the £41.7mln.
TSB said high levels of competition and mortgage growth would offset the margin expansion seen in the first half.
There was also an impact from lower average loan balances, a £14.8mln payment to the 2015 financial services compensation scheme levy and costs related to the impending Sabadell takeover.
On the plus side, the TSB mortgage broker service, launched in January, received £1.9bn of mortgage applications in the first half, with £665mln lent out.
Mortgage enhancement, the portfolio worth more than £230mln assigned by Lloyds bank after it spun-off TSB, saw pre-tax profit fall 16% to £44mln.
TSB is expected to delist from the London stock exchange next Tuesday once the £1.7bn takeover by Spanish lender Banco Sabadell goes through.