TSB Chief Executive Accused of Misleading MP’s
TSB chief executive Paul Pester is facing pressure to resign after it is alleged he misled MP’s at April’s Treasury Committee appearance.
TSB Chief Executive Paul Pester is under pressure to resign amid claims that he misled MP’s during April’s online banking meltdown. Thousands were left locked out of their bank accounts and others were given access to money that did not belong to them during the crisis; one that TSB initially tried to play down.
TSB’s parent company, Sabadell, estimates that the botched IT migration has already cost £70 million, with that number expected to rise in the coming months.
Mr Pester denies misleading MP’s, however a report published by IBM appears to contradict statements he gave to a parliamentary committee investigating the crisis.
In Hot Water
During the first week of the IT meltdown, TSB sought help from IBM in attempt to solve the issues facing consumers. During this period, IBM advised that the bank’s problems were far greater than those reported by Pester to the Treasury Committee last month.
The report also questions whether TSB carried out adequate testing before carrying out its IT migration process, stating: “IBM has not seen evidence of the application of a rigorous set of go-live criteria to prove production readiness.”
This statement by IBM once again contradicts what Pester told MP’s; before the Treasury Committee he insisted that the migration had not been rushed that that all necessary precautions had been taken beforehand.
Lack of Confidence
MP’s appear to have lost confidence in Pester’s ability to steer TSB through troubled waters. Last week Nicky Morgan, Chair of the Treasury Committee made an unprecedented move by calling for Pester to be fired.
Morgan wrote to TSB chairman Richard Meddings, insisting that “the TSB board should give serious consideration as to whether Dr Pester’s position as chief executive of TSB is sustainable.”
In her letter, Morgan also suggested that if Pester were to continue as chief executive the impact upon the UK banking sector as a whole would be significantly damaging, stating: “If he continues in his position, this could damage trust not only in TSB, but in the retail banking sector as a whole,”
The news comes after it was revealed that thousands of customers have left the bank following the IT problems and the Financial Conduct Authority (FCA) has stated it will launch a formal investigation into the issue.
There are also a growing number of reports that TSB customers are facing a rising tide of fraudulent activity following the IT problems, as fraudsters capitalise upon the ongoing uncertainty.