Catastrophic failure of TSB’s computer system costs bank more than £100m
- Chief executive Paul Pester will present TSB’s half-year results this week
- TSB will set out the full scale of the bill
The catastrophic failure of TSB’s computer system has cost the bank more than £100 million, it will reveal this week.
Chief executive Paul Pester is due to present TSB’s half-year results at the same time as parent bank Sabadell releases its own figures.
TSB will set out the full scale of the bill – including possible fines by City regulators, compensation for victims and the cost of hiring IBM to sort out the problem.
Fiasco: TSB chief executive Paul Pester’s position at the helm is looking safer
The bank is also likely to indicate that fears of a customer exodus following the fiasco have not materialised. It is thought relatively few customers have left.
Pester’s position at the helm was looking safer this weekend after earlier suggestions of a damaging split between the triathlete banker and TSB’s Spanish owners.
Allies of Pester initially blamed Sabadell’s IT division Sabis for the disaster, which saw more than a thousand people become the victims of fraud.
One supporter of Pester pointed the finger at ‘a bunch of Spanish numpties’.
Sabadell sources played down any rift last week, saying its board was giving ‘full support’ to TSB’s management.
Experts at broker RBC have previously calculated that a decision to waive overdraft fees and pay extra interest to retain customers will have cost TSB more than £40 million, while IBM and other external adviser costs would have come to £20 million. It estimated the bank would face a regulatory fine of £16 million.
RBC analyst Benjamin Toms said regulatory reviews ‘will determine whether senior management of the bank, including the chief executive, will be forced to resign’.
The Prudential Regulation Authority and the Financial Conduct Authority are investigating.
The bank has hired law firm Slaughter and May to conduct an internal probe.
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