Bungled IT upgrade pushes TSB to £107m half-year loss

TSB, the crisis-hit bank, has admitted its ongoing IT failures have cost it £176m in just over three months since a bungled system upgrade, plunging it to a worse than expected £107m half-year loss.

The disastrous switch in April led to weeks of outages to vital services for customers and many being locked out of their accounts online. More than 1,000 people lost money after being targeted in fraud attacks.

Paul Pester, the chief executive, said yesterday he was determined to stay on to fix the problems, despite coming under pressure to resign, including from MPS on the Treasury Select Committee. “I’m as committed to TSB as I’ve ever been. I’m absolutely focused on staying. I owe it to our TSB partners to try and work through the problems and put them right,” he said.

A Tsb-commissioned investigation by Slaughter and May, the law firm, is expected to report in the first half of next year. The City watchdog is also investigating what went wrong, however, and has the power to levy unlimited fines.

The TSB write-down dragged Sabadell, its Spanish parent, to a €139m (£123m) loss for the second quarter.

The UK bank said despite the hefty hit, its core capital ratio – a key measure of a bank’s resilience – was 19.2pc, higher than most rivals. In the second quarter 26,000 customers left the bank, but 20,000 joined.