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TSB reveals additional £36m loss on IT failure

29 July 2019
In first half results, UK bank said it “returns to growth” despite “additional post-migration charges” of £36.2m

TSB has revealed it paid £36m in “additional post-migration charges” in the first half of 2019, after its botched IT upgrade in April 2018. This is on top of the £330m it spent to rectify damage at the time. 

The bank said that it is: “[returning] to growth with a renewed focus on customers”. However, it is still suffering from the effects of the technical failure, which saw thousands of people locked out of their accounts after TSB tried to switch five million customers to software run by its Spanish parent Sabadell from a system operated by Lloyds Banking Group. TSB lost 80,000 customers and was forced to spend £125m in compensation.

In the report, TSB said that it has addressed all complaints relating to the IT failure and its complaints rate is now at standard industry level. Its new platform is designed to “enhance the customer experience” and usage of its mobile app – which enables customers to confirm their identities via selfies as part of TSB’s drive to fight fraud – increased by 10% since December 2018. 

CEO Debbie Crosbie, who took over the position after her predecessor Paul Pester was forced to resign following the IT crisis, said: “We are beginning to see the benefits of our new platform for our customers, including a faster mortgage applications process and the introduction of new digital capabilities like identity verification on our mobile app.”

Crosbie added: “Since joining the business in May, I have been incredibly impressed by the commitment and passion my colleagues have to serve our customers, and I firmly believe that TSB has all the right capabilities to be the leading UK challenger bank. My priority, along with my new executive team, will be to renew our focus on our customers and create our three-year strategy. This work is well underway, and we will share full details later this year.”

 

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