TSB posts £100m loss after IT debacle

TSB posts £100m loss after IT debacle

TSB has reported a pre-tax loss of £101m for 2018, in what the bank described as an "incredibly challenging year".

The loss compared with the bank’s profit of £159m in 2017, a reduction of £260m.

In its annual report and accounts published today (February 1) TSB attributed last year’s financial performance to the widespread service disruption that followed its IT migration in April, which saw nearly two million people locked out of online banking services.

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TSB's problems began when it moved 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 weeks of disruption.

The issue prompted the Financial Conduct Authority to launch an investigation into TSB.

The bank reported additional charges associated with the IT disruption totalled £330m, including customer compensation, fraud and operational losses, additional resource and advisory costs.

In its report TSB announced as of January 30, 2019, it had resolved 181,000 complaints from customers since the migration, almost 90 per cent of the 204,000 received.

The bank estimates 25 per cent of these complaints would have occurred in the ordinary course of business without the added IT struggles.

TSB reported its customers were now starting to see the benefits offered by the new IT system, including a single platform and "faster" processing times.

The bank claimed mortgage brokers can now submit mortgage applications in half the time compared with pre-migration and upload documents in real time.

It attributed this improved service to the bank witnessing its highest level of mortgage applications of any week in TSB’s history in the month of December.

Despite the financial loss made last year TSB is looking forward to 2019 with "real optimism and renewed ambition", with the bank expecting itself to "re-emerge" as the UK’s leading challenger bank.

TSB’s new chief executive Debbie Crosbie is set to join the bank in spring, following the resignation of Paul Pester in September.