TSB is suffering the fallout from its disastrous IT upgrade, with costs associated with the meltdown pushing the bank into loss in its latest financial results.
TSB set aside £176m to cover costs related to the IT problems, which left many customers unable to use basic bank services.
Its financial results for the first half of 2018 showed a loss of £107m, compared with a profit of £108m for the first half of 2017.
The bank said in a statement: “TSB has recognised additional post-migration costs [of £176.4m], including customer compensation, additional resources and forgone income as a result of waived overdraft fees and interest charges.”
TSB also said it had costs related to the resources needed to cope with the IT disaster. “Following migration, and in order to mitigate the customer impact of the service disruption, TSB recruited over 1,800 people and redeployed a further 700 partners into customer-facing roles.”
TSB CEO Paul Pester said: “I know how frustrated many customers have been by what’s happened. 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.
“Our priority in the second half of the year continues to be putting things right for our customers. Looking further ahead, we are determined to get back to bringing more competition to UK banking and, ultimately, making banking better for consumers and small businesses.”
Read more about the TSB IT migration disaster
- The Information Commissioner’s Office and the Financial Conduct Authority are assessing the IT meltdown at TSB that led to some customer accounts being seen by other customers.
- TSB’s very public IT problems will send shivers down the spine of IT teams at large banks that are yet to migrate to new core banking systems.
- TSB customers are still experiencing problems using online and mobile banking services after almost a week of disruption.
TSB’s IT crisis developed on 21 April this year, when it transferred customers’ accounts from Lloyds Bank systems to its new Proteo4UK core banking system. Customers began to experience serious problems with their mobile and internet banking services.
The new system was introduced by TSB’s owner, Sabadell, to give the bank the infrastructure required to harness the latest IT and become a challenger to the big high-street banks.
During the outage, customers were locked out of their accounts and saw money disappear from online accounts. Some were even able to see other customers’ accounts.
Costs for the bank include customer compensation as well as extra advisory services from companies such as IBM and Deloitte.