TSB CEO leaves bank after IT fiasco batters brand
05 Sep 2018

Paul Pester, the chief executive of Britain’s crisis-hit TSB Bank, is stepping down after months of pressure following a botched IT project that has cost more than 200 million euros ($231 million).

Pester ran the lender for seven years but was heavily criticised for his handling of the IT update in April that led to one of Britain’s worst banking outages, affecting up to 1.9 million digital customers.

Richard Meddings, TSB non-executive chairman, will take on the role of executive chairman with immediate effect while the bank, owned by Spain’s Sabadell (SABE.MC), looks for a new boss.

TSB’s announcement came the day after online and mobile banking customers again struggled to access their money — the latest in a series of glitches since the bank was plunged into chaos for weeks following the IT migration.

Meddings said that Pester and the TSB board made the decision about his future together, and that it did not represent any individual responsibility for the IT crisis.

“He’s not the fall guy… This is a mutual agreement within the board,” he told reporters on a conference call.

Sabadell has put the bill for the crisis at more than 200 million euros so far and it has also tarnished TSB’s reputation when it was gearing up to try to win market share with a push into business banking.

Meddings said the bank had good internal candidates to replace Pester but will also look externally, with the process likely to take a few months.

PROBLEMS PERSIST

The bank was back to a good level of service, but was still not offering a full suite of products via its digital bank and had too many outages like the one this week, Meddings said.

TSB’s troubles began when it tried to move its operations from an IT platform it was effectively renting from its former parent Lloyds Banking Group (LLOY.L) to one built by the IT arm of Sabadell, which bought TSB in 2015.

– By Emma Rumney, Sinead Cruise and Jesus Aguado, Reuters, 4 September 2018.

Link to Reuters.

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