TSB is expected to pile more misery on its customers, who were hit by a serious IT failure yesterday, when it announces as many as 100 branch closures next week, almost a fifth of its network.
The Times is reporting that the bank is expected to take the axe to its 540-strong branch network and announce hundreds of job losses.
Debbie Crosbie, who became chief executive six months ago, is trying to reduce costs and demonstrate her grip on the accident-prone business.
Regulators began an investigation into the bank after it was hit by an IT failure that led to 135,000 customers finding that wages and other payments failed to reach their accounts yesterday morning.
The setback came three days after the bank’s board was severely criticised by an independent report into an IT crash last year that locked almost two million TSB customers out of their accounts.
Customers criticised TSB on Twitter, while the bank apologised and said that no account-holder would be left out of pocket because of the failing.
“What an absolute joke @TSB is, I wake up expecting my wages to be in my bank and there’s nothing there,” one customer tweeted. Another said: “What a shambolic company, need to switch banks I think.”
TSB said yesterday: “Overnight some payments were delayed in and out of TSB accounts. This has now been resolved and the payments to and from customers have all been completed.”
It declined to comment on the branch closures or job cuts.
TSB was carved out of Lloyds Banking Group and briefly floated before being bought by Sabadell, the Spanish banking group. It has 3.8 milllion current account-holders and 7,800 employees. Sabadell wants to sell it.
The lossmaking TSB has been trimming its branch network, earmarking 14 for closure this year. However, analysts expect a much larger cull on Monday as it adjusts to a world where many customers do most of their banking on smartphones and pay by swiping debit and credit cards.
John Cronin, a banking analyst with Goodbody, the stockbroker, said that he expected TSB to announce 100 branch closures, with associated staff redundancies of between 400 and 500. He thought there would be a “material further reduction of staff beyond that”.
Cutting branches is likely to be awkward for TSB, which until recently was promoting itself as a bank deeply embedded in communities. Its slogan was “Local banking for Britain”.
Last year’s IT failure left customers unable to access their money for weeks and led to a surge in fraud attacks, forcing out Paul Pester, the chief executive. The Financial Conduct Authority, which is investigating last year’s crash, is investigating the latest failure.
A Slaughter and May report into the earlier IT fiasco, when a systems upgrade went badly wrong, criticised the board for lacking “common sense”.
TSB, which has put the cost of last year’s failure at £366 million, could face a heavy fine. Royal Bank of Scotland was fined £56 million for a systems crash in 2012, which left 6.5 million RBS, Natwest and Ulster Bank customers unable to access their accounts.