GURU OF ETHICAL BANKING ... WHO LANDED A £3.7M PAYDAY
AMONG the ego-driven ‘masters of the universe’ who run Britain’s high street banks, TSB chief executive Paul Pester – on paper at least – is the odd one out.
At first glance he is an austere preacher among sinners, who advocates simpler, customer-friendly banking at a time when other major banks seem to have reverted to type a decade after the financial crisis nearly sank the economy.
After all, most bankers are still rapacious money-grabbers, closing branches and encouraging people to build up debt through credit cards in order to boost their own bonus payouts and please the stock market.
Yet for a man who likes to sound off about the egregious practices of other bankers, the boss of the ‘ Totally Shambolic Bank’ is paid very much like those same fat cats. He took home £3.7million in 2016 (including a bonus of £2.4million), and a further £1.8million last year, for running an institution which is a fraction of the scale and complexity of Lloyds or Barclays, for example.
Now, having boasted so loudly about TSB’s superior ways, he should not be surprised by the schadenfreude among his fellow bankers at an IT systems collapse which makes the glitches encountered by all the major banks recently look like mere hiccups.
Pester promised to deliver new levels of transparency to an industry shrouded in mysteries and technicalities. He achieved it on Sunday in all the wrong ways, when TSB’s new computer systems were switched on.
In short, it was a nightmare – especially for those engaged in more complex transactions such as a house or car purchase, or mortgage application.
And what was the boss’s response to the debacle? It was to hide in the TSB bunker and put out some reassuring words on its website claiming everything would be put right shortly.
WHEN Pester, 54, finally did make a public appearance, on Sky News, he retreated into what sounded like computer geek gibberish about not ‘having enough bandwidth in our platform’.
Perhaps we should not be surprised that he used jargon to try to explain away a catastrophic and potentially brand-destroying disaster. For Dr Pester, as he should rightfully be called, is a physics graduate of Manchester University who earned his PhD at Oxford.
With that kind of background, one might have thought he was the ideal
person to wean TSB off the IT system it used when 632 branches were split off from Lloyds Bank in 2013, to be replaced by the all-singing, all-dancing systems used by its Spanish owner, Sabadell.
Pester seems to have had so much confidence that he felt it was safe to move the whole bank on to the new platform in one go – rather than do it incrementally. He also appears to have decided it was unnecessary (or too expensive) to keep the inherited Lloyds system on standby as a back-up in case of disaster.
The inadequate response to the TSB meltdown has done much to dent the reputation he forged in the immediate aftermath of the financial crisis of 200809, after he was called on by Spanishowned bank Santander UK when Gordon Brown was desperate to save the former building society Bradford & Bingley from the knacker’s yard.
By all accounts, Pester did a fine job. He moved up to Yorkshire, rolled up his sleeves and helped with the complex integration of the B&B into Santander.
What immediately strikes you on meeting
Pester is the sheer earnestness and missionary zeal for fairer banking he outlines in his gentle West Country lilt.
HE IS obsessively clean-living – indeed, his abstemious behaviour over a lunch of salmon, salad and water makes one almost yearn for the old claret-swigging City grandee. That’s because Pester, who is married with two sons and lives in the elitist haven of Hampstead, north-west London, is a sports fanatic who competes in triathlons.
He inherited the surfing bug from his father, and these days can often be found braving the breakers off the Cornish coast. But this week, in professional terms, he has taken a bad tumble.
Though the owners of TSB must have thought they had the right man in charge when they spent £1.7billion on TSB, what they actually gained was a pointy head scientist who, when tested in a crisis, failed miserably to meet the high standards of customer care he promised.