June 7, 2018 / 5:53 PM / 16 days ago

MPs have 'lost confidence' in TSB boss over IT crisis

LONDON (Reuters) - The chairman of TSB said on Thursday the bank’s chief executive, Paul Pester, had the full support of the board, after Pester came under attack from MPs over his handling of an IT crisis, casting doubt on his position.

FILE PHOTO: Chief Executive of the TSB bank, Paul Pester, poses at the bank's Baker Street branch in London September 9, 2013. REUTERS/Andrew Winning

Parliament’s Treasury Committee said earlier on Thursday it had “lost confidence” in Pester and questioned whether he should remain in his post. The IT outage left thousands of customers without access to accounts and unable to make vital payments.

TSB Chairman Richard Meddings’ response suggested Pester would remain at the bank for now, noting Pester’s progress in resolving the IT issues.

“This progress has been achieved under the leadership of Paul Pester, who continues to have the full support of the TSB Board,” Meddings said in a statement on Thursday evening.

The politicians cannot directly influence whether Pester is sacked. That decision rests with the bank’s board.

In letters to Meddings, the Financial Conduct Authority and the Prudential Regulation Authority, the chair of the Treasury Committee, Nicky Morgan, said the committee was expressing no opinion on who was responsible for the IT crisis but on Pester’s response afterwards.

“Since the IT problems at TSB began, its public communications have often been complacent and misleading. This tone has been set from the top,” Morgan said in a statement.

In her letter to Meddings, Morgan listed instances where the TSB boss had either omitted information or made statements the committee deemed inaccurate, and did not take opportunities to correct his statements.

FILE PHOTO: A sign is displayed outside a branch of the TSB bank in central London March 12, 2015. REUTERS/Neil Hall/File Photo

“Whether intentionally or not, he has not been straight with the committee and ... TSB’s customers,” she said.

Treasury Committee members called such public criticism of a serving bank CEO “unprecedented”.

The PRA and FCA declined to comment.

“I have never seen such unanimity in the Committee. Each and everyone came to the same conclusion,” said Labour party lawmaker and committee member John Mann on Twitter.

TSB’s Spanish owner, Sabadell, said earlier on Thursday the crisis had so far cost about 70 million pounds, mainly from a waiver of overdraft fees and compensation for cases of alleged fraud linked to the IT problems.

Sabadell declined to comment on the MPs’ criticisms of Pester.

In his second appearance in front of the committee on Wednesday, Pester was forced by one lawmaker to admit he had been unaware of serious problems with the bank’s fraud helpline during his first appearance, where he said most issues had been resolved.

Additional reporting by Kirstin Ridley, editing by Edmund Blair, Larry King

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