Peter Ellwood, chief executive, said the bank's 1,300-branch network was too large and more branches would be cut in future. There would be no compulsory redundancies because of the closures in 1994, but there would be job reductions, although fewer than 1993's figure of 1,700.
TSB has cut 6,200 jobs over the past five years and now employs 21,700.
The Banking, Insurance and Finance Union (Bifu) criticised TSB's plans for cuts in the light of the recovery in profits.
John Townsend, Bifu secretary, said: 'After these results it is nothing short of scandalous for the bank to even consider closing branches, forcing some customers to travel over 20 miles.
'Closures are scant reward for branch staff who have generated the profits to pay for the blunders of senior management in TSB's disastrous diversification programme.'
Sorting out those blunders was the main theme of the bank's presentation yesterday. The merchant banking subsidiary Hill Samuel's problem lending portfolio was transferred to a loan administration unit last year to be run off.
Some pounds 250m, or 40 per cent of it, is property lending. The net written- down debts after provisions at the end of October amounted to pounds 629m, compared with pounds 978m in 1992.
There was also progress at Mortgage Express, which stopped taking new business in 1991. A loss of pounds 67m last time was turned into a profit of pounds 1m.
TSB sold off eight businesses last year and its chairman, Sir Nicholas Goodison, said Hill Samuel would not now be sold off, having made a profit of pounds 96m in 1993, up 16 per cent on the year before. This was based on good performances from traditional merchant banking activities.
The combined TSB banking and insurance profit rose 8 per cent to pounds 454m, although within that retail banking fell some pounds 30m to pounds 260m, reflecting a fall in net interest income partially offset by an increase in lending income.
TSB insurance profits rose to pounds 194m from pounds 129m. Life and pensions profits rose to pounds 120m and profits from general insurance business more than doubled to pounds 68m.
The chairman said there was a possibility of acquisitions to widen TSB's customer base, although an obstacle to this was the need for building societies to demutualise before they could merge with other institutions.
The results were in line with expectations of roughly pounds 270m, since the pre-tax profit figure included a one-off pounds 24m gain from a gilts sale and pounds 14m from the increase in value of an equity holding in the insurance company.
TSB raised its final dividend by 20 per cent to 7.68p, and the risk asset ratio rose from 11.3 per cent to 13.2 per cent, one of the strongest in the clearing bank sector. TSB's shares rose 15p to 267p.
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