IT fiasco pushes TSB into a loss
The technology meltdown at TSB earlier this year has cost the bank £176.4m, pushing it into a half-year loss.
In April, almost two million customers lost access to online banking services after the bungled introduction of a new IT system. TSB says only 37% of more than 130,000 complaints have been resolved so far, and some IT issues are continuing. It reported a loss of £107.4m in the six months to 30 June compared with a profit of £108.3m last year. "I know how frustrated many customers have been by what's happened," said TSB chief executive Paul Pester. "It was not acceptable, and was not the level of service that we pride ourselves on - nor was it what our customers have come to expect from TSB." Problems continue The bank said that, as of 25 July, 135,403 complaints had been recorded and it had a team of more than 260 people looking into them. While most of TSB's services have been reinstated, issues remain with online banking. Customers are not able to apply for banking products on TSB's website, or to switch products if they hold a TSB mortgage. "We are working as hard as we can to reinstate this, and no customer will be left out of pocket as a result," a spokesperson said. The bank said that about 26,000 customers closed their TSB account in the second quarter of the year. However, it added that more than 20,000 customers opened a new bank account or switched their account to TSB in the same period. When TSB split from the Lloyds Banking Group, it continued to use Lloyds' computer system while a new one was developed. In April, it carried out a planned migration of customer data, which involved moving customer records from the old system to one managed by its new Spanish owner, Sabadell. However, the move left many customers struggling to make transactions and see their balances, with the problems continuing for several weeks. TSB came under fierce criticism for the IT failings, and MPs on the Treasury Committee called on Mr Pester to resign. But Mr Pester has remained in his post, and he told the Reuters news agency on Friday that he planned to stay with the bank. "I'm focused 100% on putting things right for our customers," he said. In June, the Financial Conduct Authority launched a formal investigation into the meltdown. Its chief executive, Andrew Bailey, took the unusual step of making the probe public, "given the level of public interest". TSB's loss was large enough to have dragged TSB's parent company, Spanish banking group Banco Sabadell, into the red. It reported a loss of €138.7m (£123m) in the three months to 30 June, due to costs stemming from TSB's IT problems.