Daily Mail

TSB to pay Spanish owner £110m a year for broken IT system

- By James Burton

TSB could be forced to pay its Spanish owners £110m a year for a botched IT upgrade which brought the bank to its knees.

The money will be due to Sabis, the digital arm of parent company Sabadell, for running a computer system that failed spectacula­rly when it was switched on – locking 1.9m customers out of their accounts.

TSB chief executive Paul Pester confirmed that Sabis

owns the system’s physical infrastruc­ture and the bank paid the Spanish division £110m a year to run the it.

The lender has already incurred costs of £124.5m because of the IT system, according to its 2017 annual report.

The bill will ultimately be paid with revenue earned from UK customers.

Sabadell’s Spanish bosses have been accused of washing their hands of the British bank in the fall-out after the IT debacle. Officials including Sabadell chairman Josep Oliu and chief executive Jaime Guardiola Romojaro were caught by the Mail enjoying lavish hospitalit­y and swigging Cava and beer at a tennis tournament in Barcelona less than week after the meltdown while millions of customers were still locked out of their accounts in the UK.

Campaigner­s yesterday insisted the lender – which has been dubbed Totally Shambolic Bank – should not pay as it could be seen as a reward for failure.

Labour MP Wes Streeting, a member of the Treasury Select Committee, said: ‘Given the enormous damage that has been done to TSB customers and their personal lives and businesses, it’s inconceiva­ble that a single penny of their money should be given to Sabadell for this fiasco.’

The IT upgrade left TSB customers unable to pay bills.

It also knocked out critical systems at branches, leading to long queues as customers unable to get online also failed to get answers in person either.

Thousands of callers jammed TSB’s switchboar­d leaving it totally overwhelme­d. It was not long before fraudsters launched one of the biggest attacks in banking history by pretending to be TSB staff who could help struggling customers if they shared their personal details. They managed to con more than 1,300 out of money – many of whom were stuck on hold with the bank while their life savings were stolen. When customers gave up and tried to switch banks, TSB wrongly registered 370 of them as dead.

Streeting asked Pester last week if TSB will be making a payment to Sabis for designing the IT system.

Pester said: ‘When we get to the bottom of that, the appropriat­e payments will be made.’

Miguel Montes, Sabadell’s chief operating officer and a member of the TSB board, said: ‘There has not been any kind of discussion about payments.’

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