TSB Suffers £105m Loss from 2018 IT Meltdown
TSB suffered £105.4m in pre-tax losses for 2018, attributing the majority of these were attributed to a large-scale IT meltdown, which left customers locked out of their accounts for several weeks.
The IT crash in April 2018 was caused by an IT migration as TSB attempted to shift five million customers and £1.3 billion onto the software platforms of its parent, Spain's Banco Sabadell. TSB's internet banking was operating at around 50 percent of capacity two weeks after the problems first emerged, meaning that only five out of every 10 customers trying to use TSB’s online service would succeed, the bank admitted. The previous system was operated by Lloyds Banking Group Plc, which sold TSB three years ago.
In total, TSB says it has incurred around £330.2m in post-migration costs, including customer compensation, additional resources, fraud and foregone income, partly offset by the provisional recovery of £153.0m from TSB’s IT provider, Sabis.
Around 80,000 customers switched their bank account away from TSB in 2018 with volumes peaking in Q2; this compares with around 50,000 customers switching their account away from TSB in 2017.