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TSB reports big first-half loss due to costs related to botched IT update earlier this year

The lender - which is owned by Spain’s Banco Sabadell - said it had recognised costs related to the IT outage of £176.4mln, while the update itself cost £318mln
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TSB's statutory pre-tax loss for the six months to 30 June 2018 was £107.4mln, against a profit of £108.3mln at the same stage in 2017

TSB has reported a first-half pre-tax loss of over £100mln reflecting the impact of costs related to a botched IT update which plunged the lender into chaos for weeks earlier this year.

In a statement on its website, the lender - which is owned by Spain’s Banco Sabadell - said it had recognised costs related to the IT outage of £176.4mln, while the update itself cost £318mln.

READ: TSB ignored warnings IT system was not ready before disastrous switchover, says union

The group’s statutory pre-tax loss for the six months to 30 June 2018 was £107.4mln, against a profit of £108.3mln at the same stage in 2017.

As at 30 June 2018, TSB said its total customer lending was £31.0bn, total customer deposits stood at £29.6bn and its Common Equity Tier 1 capital ratio remained strong at 19.2%.

The firm said around 26,000 customers switched their bank account away from TSB in the period, although more than 20,000 customers opened a new bank account or switched their account to TSB in the second quarter of the year.

TSB’s CEO Paul Pester said: “We’re making progress in resolving the service problems customers experienced following our IT migration, and we will continue to work tirelessly until we have put things right.”

He added: “Our priority in the second half of the year continues to be putting things right for our customers.  Looking further ahead we are determined to get back to bringing more competition to UK banking and ultimately making banking better for consumers and small businesses.”

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