Search on for new TSB chief executive

● Chairman insists Pester’s decision to leave by ‘mutual agreement’

TSB chief executive Paul Pester is to leave the bank with a payout of nearly £1.7 million after standing down in the wake of a string of IT failures. Chairman Richard Meddings said Pester was “not the fall guy” and insisted his decision to leave was by “mutual agreement”.

The departing boss, who has been placed on gardening leave, will get £1.2m in severance pay and a “historical” bonus of around £480,000 that is due from the period prior to TSB’S takeover by Spain’s Sabadell in 2015. All other performance-related pay has been frozen amid investigations into the recent IT failures at the lender.

Pester’s departure comes after a seven-year stint at the top, which has been marred by the IT woes in April that left up to 1.9 million people using the bank’s digital and mobile banking facilities locked out of their accounts. It has suffered enduring IT issues since then, with TSB forced to apologise once more at the start of this week after many customers were again left unable to access their accounts.

0 During Paul Pester’s tenure, the bank has suffered a string of IT issues

PAUL PESTER

Meddings, who is taking on the role of executive chairman until a new chief executive is appointed, said: “Although there is more to do to achieve full stability 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.”

Pester said it had been a “privilege” to lead the bank, but admitted that 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 Treasury select committee calling for him to be sacked.

Treasury committee chairwoman Nicky Morgan said yesterday: “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 Pester’s position as chief executive of TSB. In this light, it is right that he is stepping down.

“But the committee remains concerned about the continuing problems at TSB, including unacceptable delays in compensating customers who have been badly let down. It is to be hoped that Pester’s successor is able to restore the confidence of the bank’s longsuffering customers.”

Consumer group Which? also cheered a change at the top of the bank, hailing it an “opportunity for TSB to finally get to grips with the IT crisis that has affected millions and ensure it focuses on what really matters – providing the great service the bank’s customers deserve”.

In a statement, Pester said: “Thanks to the fantastic work and commitment of all TSB partners, we have achieved real success in creating a bank which is truly consumer-focused, attracting customers from the UK’S established banks, and growing TSB’S balance sheet from circa £18 billion to circa £31bn 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.”

“The last few months have been challenging for everyone at TSB. However, I want to thank all my colleagues for their dedication and commitment”