TSB boss gets £1.7m exit payout
TSB boss Paul Pester is to leave with a payout of almost £1.7million in the wake of the bank’s IT failures, it emerged yesterday.
The lender confirmed Mr Pester, who has been placed on gardening leave, will get £1.2million in severance pay and a “historical” bonus of about £480,000.
All other performance-related pay has been frozen amid investigations into the bank’s recent IT troubles.
In April, customers were left without access to online banking services for several weeks when an attempt to move data to a new computer system went wrong.
TSB was forced to apologise once more on Monday after many customers were again left unable to access their accounts.
TSB chairman Richard Meddings insisted yesterday the decision for Mr Pester to leave was by “mutual agreement” and denied his departure was linked to the IT failures and ongoing investigations.
Mr Meddings will now take on the role of executive chairman until a new chief executive is appointed.
Mr Meddings said: “Although there is more to do to achieve full stability Nicky Morgan said exit was ‘right’ move for customers, the bank’s IT systems and services are much improved since the IT migration. “Paul and the board have therefore agreed that this is the right time to appoint a new chief executive for TSB.” Mr Pester said it had been a “privilege” to lead the bank, but admitted the past few months have been “challenging for everyone at TSB”. He has come under particular fire after the recent bungled IT switch, with MPs on the influential Treasury Select Committee calling for him to be sacked.
Committee chairwoman Nicky Morgan welcomed news of his departure and said “it is right” that he should step down.
She said: “Since the IT problems at TSB began, Paul Pester set the tone for TSB’s complacent and misleading public communications.
“The Treasury Committee, therefore, concluded that it lost confidence in Mr Pester’s position as chief executive of TSB.”
But she said his successor will need to restore confidence in the group, with the committee remaining concerned about the “continuing problems at TSB, including unacceptable delays in compensating customers who have been badly let down”.
TSB’s troubles were triggered by a migration of customer data from former owner Lloyds’s IT system to a new one managed by TSB’s current owner Sabadell in April.
Mr Pester was chosen by Lloyds to oversee TSB’s demerger and to run it as a separate business. He achieved considerable success launching the bank on the stock market in 2014 and overseeing the £1.7billion takeover by Banco Sabadell of Spain in March 2015. During that time, TSB has emerged as a capable challenger bank, increasing its customer base to more than five million and taking the size of its balance sheet from £18billion to £31billion.
Mr Pester said in a statement: “Five years ago, on September 9, 2013, we launched TSB back on to high streets across Britain.
“I vividly remember standing in our Baker Street branch, waiting to reveal TSB above the door. But it wasn’t just a sign we were revealing – we were revealing a bank with a clear mission to bring more competition to UK banking and ultimately make banking better for all UK consumers.
“Thanks to the fantastic work and commitment of all TSB partners, we have achieved real success in creating a bank which is truly consumerfocused, attracting customers from the UK’s established banks, and growing TSB’s balance sheet from £18billion to £31billion today.
“The last few months have been challenging for everyone at TSB. However, I want to thank all my colleagues across TSB for their dedication and commitment during this period and for their focus on putting things right for TSB customers.
“It has been a privilege to lead TSB through its creation and first five years. I look forward to seeing the next stage of our bank’s history evolve.”