TSB plans to close 86 branches, cutting up to 400 jobs over the course of next year, as the new chief executive, Debbie Crosbie, seeks to slash costs and move on from the computer meltdown that has dented the high street lender’s reputation.
The bank aims to save £100m by 2022 from the cuts, which would reduce its high-street branch network to 454, it announced on Monday.
The costs of redundancy and other restructuring expenses would amount to £180m by 2022, TSB said. It also announced £120m in new investment in its digital channels over next three years.
Crosbie was appointed to take over TSB last year, after her predecessor, Paul Pester, resigned amid intense criticism over his handling of the breakdown of the bank’s computer systems.
Crosbie was previously chief operating officer at CYBG, the owner of the Clydesdale and Yorkshire brands that merged with Virgin Money.
Thousands of customers were locked out of their accounts for weeks from April 2018 when the bank tried to switch to a new core computer platform.
Compensation and other costs incurred while trying to bring the bank back online mounted to £366m. A report commissioned by TSB from law firm Slaughter and May found that executives had lacked common sense and shifted customers to a new IT platform before it had been fully tested.
The move had been seen as a key step in making TSB better able to offer combined digital and branch-based services.
TSB, which has about 5 million UK customers, was spun out of Lloyds Banking Group to address competition concerns in the aftermath of a government bailout during the financial crisis.
TSB’s struggles had prompted speculation of a sale by Sabadell, the Spanish bank that bought it in 2015. However, Sabadell’s chief executive, Jaime Guardiola, said on Monday TSB was a “key lever to improve our profitability going forward”.
Crosbie said she had made “difficult decisions” amid “a challenging external environment.”
She added: “With a trusted brand, modern platform, and national presence, TSB is well placed to deliver – but we need to make changes to enable us to compete.”