TSB boss Paul Pester eyes up acquiring other challenger banks

Lynsey Barber
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Paul Pester eyes challenger bank buys (Source: Getty)

TSB, the self-styled challenger bank spun-off from Lloyds last year, could gobble up its competition if the bank's boss has his way.

Paul Pester wants to "take on the big guys" and would consider buying up other challenger banks to make that happen.

"We are Britain's biggest challenger bank, but we want to really take on those big guys. If that means rolling up some of the smaller banks, we would consider doing that," he said, speaking to BBC Radio 5 Live this morning.

Although TSB is being snapped up by Spanish bank Sabadell for a princely £1.7bn after less than a year as a public company, Pester has his eye on the UK's plethora of challenger banks which have sprung up in the aftermath of the financial crisis.

Barclays, Lloyds (which still holds a 50 per cent stake in TSB), HSBC and RBS, dominate high street banking, controlling nearly 80 per cent of the personal current account market and 85 per cent of lending to small businesses.

In the UK alone more than 26 hopefuls have talked to regulators about a banking license.

Discussing the takeover by Sabadell, Pester said the offer was a surprise and "a vote of confidence" in TSB. Pester also said he would be "amazed if people trust our banks" after the crisis and a series of scandals such as forex rigging and PPI mis-selling.

"If we look across the whole industry, results we've seen... make us really question that. Banks are there to fuel local economic growth. In the banking crisis, banks lost connection with their purpose, they lost connection with the role they play in the wider community and societies that they serve."

TSB yesterday posted a 153 per cent rise in first-quarter profit.

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