High street lender TSB is set to pay out £28m to its 7,700 employees after an impressive jump in pre-tax profit last year.

The bank said statutory pre-tax profit rose 169% to £182m in 2016 from £67.6m a year earlier, amid an 11.4% jump in lending to £29.4bn, and a 13.6% rise in customer deposits, which also reached £29.4bn.

When stripped of one-off items and currency effects, pre-tax profit rose 68.1% to £177.7m.

TSB is now preparing to shell out £28m to its 7,700 employees – a £2.5m rise on the bonus award paid out last year.

Most will receive a payout equivalent to more than six weeks' pay or 12.5% of their basic salary.

Chief executive Paul Pester said: 'When we launched TSB back in 2013, we set out to do our bit to break the stranglehold of the big five banks and bring a different sort of banking to the UK. Three years on, we've shown that a bank focused on serving local communities can really thrive.'

He added: 'We've grown at twice the pace we aspired to back in 2014. More people chose TSB than ever before in 2016 and we are now Britain's most recommended high street bank.'

TSB was spun out from Lloyds Banking Group in 2013 and then taken over by Spanish rival Banco de Sabadell in 2015.