TSB Incurs £100 Million Loss Following IT Migration Disaster
Despite significant losses, executive chairman Richard Meddings said TSB is now a “stronger bank.”
TSB has revealed that it lost more than £100 million following a catastrophic IT migration that caused widespread disruption last year.
£105.4 million pound – before tax – was lost during 2018, the bank confirmed, marking a significant loss compared to its 2017 profits of £162.7 million.
TSB said the loss was directly due to its IT migration issues which saw nearly two million customers locked out of their accounts. These issues have cost the bank in excess of £330 million so far, with £125 million in compensation being paid to customers.
The bank has also spent more than £122 million on emergency recruitment, £33 million in uncollected fees and £49 million in fraud.
Losses for the bank will be mitigated by compensation of its own, however. Around £153 million is due to be recovered from its IT provider, Sabis.
In a statement, TSB’s executive chairman Richard Meddings said: “Whilst the migration caused considerable difficulties, we’re now a stronger bank, operating on a more coherent and modern platform and able to service more customers than ever before.”
“We have a truly customer-focused team, a strong banking system that customers are starting to see the benefits of, and look forward to our new chief executive, Debbie Crosbie, joining us later this year,” Meddings added.
- TSB’s Paul Pester Resigns Following IT Meltdown
- Fraudsters Capitalise on TSB Customer Woes
- TSB Chief Executive Accused of Misleading MP’s
Meddings said that the bank has now resolved 90% of customer complaints following its migration issues. More than 200,000 customers lodged complaints with TSB over disruption caused to banking services.
Another positive highlighted by the bank was an increase in customers in 2018. TSB added an extra 140,000 customers, which offsets the 80,000 who closed their accounts.