TSB blames IT meltdown for £105.4m loss in 2018

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TSB has blamed the impact of the IT meltdown the bank suffered last year for a pre-tax loss of £105.4m in 2018.

The bank said the failed migration of 1.3 billion customer records to a new IT system in April led to £330.2m in costs in the year to 31 December.

TSB also blamed costs associated with customer compensation, additional resources to secure the system as well as fraud for the losses.

Up to 1.9 million digital and mobile banking customers were left unable to access their accounts, after the botched migration of their data records from TSB’s former owner Lloyds Bank’s IT system, to a new one managed by the bank’s Spanish owner, Sabadell.

The IT debacle, coupled with the disruptions to bank account access that carried on for several months, led to some 80,000 customers switching away from TSB in 2018.

The troubled bank said it had since recovered £153m from IT provider Sabis.

The latest figures follow on from TSB’s recorded loss of £107.4m in the first six months to 30 June last year, following the meltdown.

At the time, the bank put the cost of the debacle at £176.4m, which included bringing in IT specialists from IBM to help restore the system and compensating customers.

The disruption led to the eventual resignation of embattled chief executive Paul Pester in September, after seven years in the role.

TSB executive chairman Richard Meddings said: “Last year was TSB’s most challenging year.

“But we enter 2019 with renewed ambition to re-emerge as the leading challenger bank in the UK – firmly on the side of the customer.

“We have a truly customer-focused team, a strong banking system that customers are starting to see the benefits of, and look forward to our new CEO, Debbie Crosbie, joining us later this year.”

The bank announced former CYBG chief operating officer Ms Crosbie as Paul Pester’s replacement in November.

TSB said she will join the business in the spring.

(c) Sky News 2019: TSB blames IT meltdown for £105.4m loss in 2018

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