Bank suffers from computer chaos
TSB plunges to annual loss following IT meltdown
TSB suffered a pre-tax loss of £105.4 million last year following its IT meltdown that led to the departure of chief executive Paul Pester.
The failure of the bank’s new computer system left thousands of customers unable to access their own money. Despite the customer disruption 140,000 joined the bank against 80,000 who moved to other banks.
TSB, which reported a profit of £162.7m in 2017, said that its technology problems cost the bank £330.2m last year including payments for customer compensation, partly offset by the recovery of £153m from IT provider, Sabis.
There was lost income including £125.2m in compensation and other remediation costs. Additional resource and advisory costs to support the remediation of systems and operating defects of £122.4m. It also suffered £49.1m in fraud and operational losses of £49.1m. It forefeited income of £33.5m relating primarily to waived fees and charges as a result of the service disruption.
Executive chairman Richard Meddings, said: “Last year was TSB’s most challenging year.”
He added: “Whilst the migration caused considerable difficulties, we’re now a stronger bank, operating on a more coherent and modern platform, and able to service more customers than ever before.”
TSB, now owned by Spanish bank Sabadell, said it paid its staff £1,500 each in December “to recognise the exceptional team effort across the business to put things right for customers”. Executives will not receive a bonus.
Clydesdale Bank chief operating officer Debbie Crosbie will join as chief executive in the spring and will face a rebuilding task both internally and externally to restore trust in its operating systems.