TSB boss ‘has damaged trust in banking sector and must go’ – MPs
Chair of the Treasury Select Committee, Nicky Morgan MP, has written to the TSB board stating the committee has ‘lost confidence’ in the ability of TSB CEO Peter Pester to right the bank’s IT troubles.
Following the Treasury Committee’s evidence session with TSB this week, Morgan asked whether Pester’s position was sustainable given his inability to offer a frank assessment of the bank’s problems and deal with them.
The letter said: “It is concerned that, if he continues in his position, this could damage trust not only in TSB, but in the retail banking sector as a whole. I ask that the board consider the committee’s view as a matter of urgency.”
“Since the IT problems at TSB began, its public communications have often been complacent and misleading. This tone has been set from the top – by Paul Pester – and whether intentionally or not, he has not been straight with the committee and TSB customers.”
Morgan said: “Pester’s statements that ‘everything is running smoothly for the vast majority of our […] customers’ and that ‘there will be no barriers’ to customers switching accounts, and his denial that there were problems on TSB’s fraud reporting line, are all examples of this.
“The Treasury Committee, therefore, has lost confidence in Dr Pester’s position as chief executive of TSB, and considers that the TSB board should give serious consideration as to whether his position is sustainable.”
The bank was forced to admit more than 1,300 customers had money stolen as a result of its IT problems, with some losing their entire life savings.
The bank acknowledged that its disastrous technology migration in mid-April created an opportunity for criminals to exploit its customers at 70 times the level it was expecting.
“We saw a very aggressive targeting within one week of the problems,” TSB chief executive Paul Pester told the Treasury Select Committee.
The bank confirmed it is working to compensate any customers who have been defrauded.
Both the Financial Conduct Authority and the Prudential Regulatory Authority have launched an investigation into TSB’s IT catastrophe.