TSB is slashing banker bonuses in half, as the Spanish-owned lender nurses an annual loss of £205m and prepares for a potential sale. The bank’s annual report, due Wednesday, is expected to confirm that bonuses will be cut to just 3.9% of salary, which is less than half the 8.6% bonus granted for 2019. Chief executive Debbie Crosbie – who has waived her own bonus in light of the Covid crisis – is understood to have broken the news to staff in a virtual meeting on Monday morning. TSB’s roughly 6,500 workers, who shared a £17.7m bonus pool for 2019, are expected to share a pot of less than £9.5m this year. That is on top of an annual salary increase of just 0.75%, though unions bargained for a minimum £200 increase, meaning that the lowest-paid staff will see their salaries edge up by 1.1%. The salary increase has yet to be approved. Some rival bankers have fared worse. TSB’s former parent and larger rival Lloyds Banking Group announced in December that it was pre-emptively scrapping all bonuses after missing financial targets and recording a sharp drop in profits during the Covid crisis. It leaves staff across its Halifax, Lloyds and Bank of Scotland brands without a bonus pot for the first time in recent memory. Ged Nichols, general secretary of one of TSB’s staff unions, Accord, said: “2020 was a very difficult year. TSB’s staff have been brilliant. The recognition for partners through the variable pay award is being really well received. “The negotiated pay offer for 2021 isn’t all that we wanted. We’ll judge how members react to both elements of the news before deciding our next steps,” he said. Crosbie’s announcement on Monday came just hours after TSB revealed that it had swung to an annual loss of £205m in 2020, compared with a £46m profit a year earlier, after putting aside £164m to cover a potential surge in defaults sparked by the Covid crisis. The bank was also hit by more than £90m in costs linked to a three-year turnaround programme, which recently resulted in plans to cut nearly 1,000 staff and close 164 branches. The lender is now preparing itself for a potential sale. In November, it emerged that TSB’s Spanish owner, Sabadell, had appointed Goldman Sachs to conduct a review of the UK lender, which it bought for £1.7bn in 2015. Speaking to journalists on Monday, Crosbie said Sabadell had not made a final decision, but was likely to make an announcement as part of a strategic review by May. It is understood that Sabadell is open to other options including selling a partial stake, floating TSB on the stock exchange or maintaining full ownership. Commenting on the 2020 bonus decision, a TSB spokesperson said staff had “excelled” in supporting customers during a challenging year. “We’re pleased to be able to recognise them for their service. This is in addition to the payment of £500 made to frontline staff last year.”