TSB executives expected to face heavy criticism in damning report on IT meltdown

By John Reynolds on 11th November 2019

Challenger Banks

The criticism comes amid a report that TSB is contemplating closing up to 100 branches.

TSB executives expected to face heavy criticism in damning report on IT meltdown
Image source: Debbie Crosbie, TSB's CEO.

TSB board members are expected to face heavy criticism for the bank's IT fiasco last year which left two million customers unable to use their current accounts in a damning new report.

According to Sky News, City law company Slaughter and May has submitted its final report on the IT meltdown after months of delay.

The report comes amid a report the bank is contemplating closing up to 100 branches.

The 300-page report, which is thought to have cost £25m, is likely to be published later this month.

The report is expected to criticise TSB for not adequately preparing for crucial systems migration, with TSB board members expected to take the brunt of the criticism. The meltdown cost the bank £330m.

But Chairman Richard Meddings is expected not to be criticised as heavily as others, as he took up the role only weeks before the fiasco.

According to Sky News, a number of current and former TSB managers have had outstanding deferred share awards dating back to 2015 cancelled by the lender because of the debacle.

The decision has prompted a number of those executives to contemplate taking legal action again the bank.

TSB's owner, the Spanish financial services company Banco Sabadell, is keen for the report to be published before TSB's strategy update presented by new Chief Executive Debbie Crosbie on November 25.

The Financial Conduct Authority and Prudential Regulation Authority are expected to undertake a joint probe in the wake of the report.

Meanwhile, a report in the Guardian said TSB is considering closing to 100 branches, which could put 400 jobs at risk.

The General Secretary for the Affinity trade union Mark Brown said TSB is likely to reveal up to 100 branch closures when it unveils its new strategy.

Affinity represents around half of TSB's 7,795 staff.

The majority of the branch closures are those which employ just a handful of workers and operate under reduced hours, according to the report.

The move to axe stores comes amid a landscape that has seen more than 3,000 branch closers since 2015.

Brown told the Guardian: “The results of TSB’s strategic review are going to be more branch closures and more job losses right across the bank. Hundreds of staff who saved TSB following its IT meltdown last year are going to be sacrificed on the altars of costs, efficiency and technology.

“It’s clear Ms Crosbie was brought in by Sabadell to cut costs, increase income and sort out the IT system before TSB is sold to the highest bidder in a few years’ time.”

A TSB spokeswoman said: “We don’t comment on speculation.”

AltFi Toronto Summit 2019

AltFi is coming back to Toronto following on from a highly successful event last year. We'll again be bringing a high profile international showcase of speakers from the leading fintech and alternative finance leaders.

11th December 2019


Companies in this Article:

TSB
Financial Conduct Authority

More like this:

Revolut makes pensions push

6th December 2019
Daniel Lanyon

Metro Bank CEO stands down

9th December 2019
John Reynolds