By Tapan Panchal

LONDON--TSB Banking Group PLC (TSB.LN), which was spun-off from Lloyds Banking Group PLC (LLOY.LN), Thursday reported a significant rise in first half pretax profit, and said that it expects a further increase in its cost base due to the ongoing development of the business on a standalone basis.

For the six months to June 30, the company reported a pretax profit of 128.5 million pounds ($217.5 million), up from GBP36.1 million in the same period a year earlier. Net interest income rose to GBP374.6 million from GBP128.8 million.

Pretax profit on management basis, which excludes volatility from derivatives and a gain from withdrawal from defined benefit pension schemes, totaled GBP78.6 million, up from GBP36.1 million.

TSB expects its cost base to increase up to around GBP700 million for 2014.

Write to Tapan Panchal at tapan.panchal@wsj.com

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