TSB has published strategy plans which include closing 82 branch closures next year - reducing its network from 540 to 454 - and increase investment in IT, following repeated problems with its back-office systems.

Chief executive Debbie Crosbie outlined the bank’s three-year strategy today to restore competitiveness, with £120 million earmarked for digital products and services that will customers.

It is aiming for circa five per cent net lending growth per annum, with a profit target of between £130 million and £140 million by 2022.

This will be driven by improved efficiencies, with a target of 15 per cent improvement in cost to income ratio and £100 million in net cost savings over the period.

Crosbie said: “With a trusted brand, modern platform, and national presence, TSB is well placed to deliver – but we need to make changes to enable us to compete.

“The plan we’re sharing today involves some difficult decisions, but it sets TSB up to succeed in the future.”

Last week, TSB published the independent investigation into its recent IT problems, which criticised the planning and preparation for legacy system migration could have been done differently, including the need for stronger oversight of suppliers and questions around how testing was carried out.

Jaime Guardiola, chief executive at parent company Sabadell, said: “TSB brings enhanced scale and broader geographical diversification to the group, and is a key lever to improve our profitability going forward.

“I am very confident that TSB has the right team to deliver this plan and they have all the support from the Group.”

TSB’s plan is to become more mobile and digitally focused, with an easier to use service and more relevant products across all of the bank’s channels.

Investment will be put into mobile in-app onboarding and sales, as well as automation of some branches.

It will invest in self-service branches alongside flagships, designed to be in the right locations to meet customer demand and complement the focus on digital services.

TSB’s new IT platform - the transfer to which started its IT woes last April - forms the foundation of multi-cloud and data capabilities, “using data driven insights and analytics to improve customer experiences for its target segment”.

The bank plans to leverage Open Banking and the right third-party relationships to improve its offering to customers, encouraging innovation and collaboration with FinTechs – giving the partnership with Square as an example.

A digital led approach will mean three quarters of TSB’s customers will be digitally active over the next three years, according to the plan.

TSB will also streamline head office functions and remove duplication, becoming a more agile organisation with clear customer ownership.

In response to IT glitches and the Treasury Committee’s report on banking operational resilience, TSB said conduct risk will be managed by a specific customer banking director, with operational risk coming under the chief operating officer’s remit.

“We are transitioning away from a diverse range of suppliers managed on our behalf by Sabis to take direct control in the UK with clear accountability by our COO,” read the statement.

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