TSB chief executive to stand down after IT failings

TSB chief executive to stand down after IT failings

The chief executive of TSB has agreed to step down after the bank faced IT problems which left almost two million people locked out of online banking services.

Paul Pester has been chief executive of TSB for seven years but will now be leaving the company.

TSB's chairman, Richard Meddings, will become executive chairman with immediate effect to allow there to be a full public search for a new chief executive.

In a statement the bank said: "Whilst there is still work to do to achieve full stability for customers, TSB’s systems and services are much improved since the bank’s IT migration earlier this year.

"Paul and the board have therefore agreed that this is the right time for Paul to step down and to appoint a new CEO for TSB."

Problems with TSB's IT system began in April, when the bank began moving its customer data from a system controlled by its former owner, Lloyds Banking Group, to a new system built by its new owner, the Spanish banking group, Banco Sabadell.

The new system proved unable to cope with the number of people attempting to use it and some TSB customers faced problems for weeks after the migration.

The Financial Conduct Authority later revealed it was investigating TSB over the fiasco.

Mr Meddings, the former group finance director of Standard Chartered, said: "Paul has made an enormous contribution to TSB. Thanks to his passion and commitment, TSB is today one of the UK’s strongest challenger banks, serving over five million customers across the UK.

"On behalf of the TSB board, I want to thank Paul for everything he has achieved as CEO and pay tribute to the contribution he has made in bringing greater competition to the UK retail banking market.

"Together with the executive committee, we have three immediate priorities: to complete the work of putting things right for customers; to enable the bank to achieve full functionality – including the availability of all product services and launch of a leading business banking offer; and appointing a CEO for the next chapter of TSB."

In July TSB revealed it had fallen into the red on the back of its IT failings, making a loss of £107.4m in the first six months of 2018, compared with a profit of £108.3m in the same period last year.

On top of this, TSB has put aside £176m to handle the costs of the fiasco, which will cover customer compensation, additional resources and foregone income as a result of waived overdraft fees and interest charges.

Mr Pester said: "The last few months have been challenging for everyone at TSB. However, I want to thank all my colleagues across TSB for their dedication and commitment during this period and for their focus on putting things right for TSB customers."