TSB has reported a loss of £105.4m last year after its IT upgrade when disastrously wrong, costing the bank £330.2m.
In 2017 the bank reported a profit of £162.7m, however, the upgrade which potentially caused around 80,000 customers to switch their accounts from TSB, caused a substantial loss for the bank last year.
The upgrade saw thousands of the banks’ customers left without services for weeks; the bank has informed that it has now resolved around 181,000 of the 204,000 complaints made and that it is expecting approximately £153m from the computer provider, Sabis.
The upgrade resulted in a total cost of £330.2m to the bank and caused heavy workloads for its staff as they tried to deal with all customer complaints and assist customers however they could. the bank stated that the staff were rewarded £1,500 in December; this excluded executives, who will also not receive bonuses for 2018.
TSB’s 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.”
The IT disaster caused major disruption, including that of weddings, and house moves, and the bank is now keen to look forward in 2019, leaving the catastrophe in the past.
TSB commissioned an independent review of the issue to identify what caused the problem, how they can ensure this never happens again and what has been learnt from it. However, the Financial Conduct Authority (FCA) are also carrying out an inquiry, and the City regulator possesses the power to hand out hefty fines totalling millions of pounds. The regulator has already shown concern after it was critical of the bank’s response to the ‘crisis’ last year. The FCA are carrying out their enquiry with the Bank of England’s Prudential Regulation Authority, and it is believed that it could be months before it is complete.