MPs have 'lost confidence' in TSB boss Paul Pester after online banking meltdown

'TSB board should give serious consideration as to whether Dr Pester’s position as chief executive of TSB is sustainable,' committee says

TSB's boss was criticised for his responses to a grilling from MPs last month (Parliament Live)

MPs say they have “lost confidence” in TSB boss Paul Pester over his handling of IT failures at the bank that saw millions of customers locked out of their online accounts.

Some customers are still experiencing disruption more than six weeks after the problems began.

In a letter to the TSB board, Nicky Morgan, chair of the Commons Treasury Committee, said the technology issues had been exacerbated by “complacent and misleading” communications which have “failed to acknowledge the specific problems faced by customers”.

Ms Morgan also said that Mr Pester had “not been straight with the Committee, and more importantly TSB's customers, about the scale, nature and severity of the problems at TSB, and of the bank's response”.

The TSB boss wrote to customers on 25 April - two days after the meltdown began - telling them that “everything is running smoothly for the vast majority of our five million customers”. In fact, around half of the bank’s customers could not access their accounts online.

When grilled by committee members on 2 May he denied TSB’s fraud reporting line was experiencing problems, when in fact call volumes, waiting times and abandon rates were far higher than normal Ms Morgan said.

The letter states: “As a result, the committee considers that the TSB board should give serious consideration as to whether Dr Pester’s position as chief executive of TSB is sustainable.

“The Committee has lost confidence in his ability to provide a full and frank assessment of the problems at TSB, and to deal with them in the best interests of its customers.

“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."

On Wednesday, the Financial Conduct Authority (FCA) confirmed that it would investigate the IT failures. FCA chief executive Andrew Bailey wrote to the committee accusing the TSB boss of “portraying an optimistic view” of services after issues emerged.

“The FCA has been dissatisfied with TSB’s communications with its customers and we have had concerns that TSB was not being open and transparent about the issues experienced,” Mr Bailey said.

TSB’s online banking and mobile app services have been disrupted for weeks after problems in moving the digital operation onto a new platform.