【neil peart time machine drum kit】IT meltdown at Britain's TSB burdens Spanish parent Sabadell
By Iain Withers
LONDON (Reuters) - Britain's TSB Bank,neil peart time machine drum kit a subsidiary of Spain's Sabadell, plunged to a 105.4 million pound ($137.9 million) loss last year as costs from a major IT meltdown ratcheted up further.
Executives at TSB were deprived of their bonuses after the bill for a botched IT upgrade that locked nearly two million customers out of their accounts rose to 330 million pounds.
Instead of awarding bonuses to executives, all TSB's remaining 8,300 staff received a bonus of 1,500 pounds for the year.
The loss compared to a profit of 162.7 million pounds in 2017 for TSB. The costs also dragged Spanish parent company Sabadell's net profits down by 54 percent to 328 million euros (288 million pounds).
Sabadell shares were down close to 10 percent by lunchtime trading in Madrid, with analysts at KBW warning weak performance in the UK had weighed on better numbers in Spain.
TSB Executive Chairman Richard Meddings sought to play down speculation that the IT fiasco had soured relations between TSB and Sabadell and made a split more likely, telling reporters they had a harmonious relationship.
TSB's numbers would have been even worse but for 153 million pounds of compensation clawed back from Sabadell for the outages after transferring customer records to its in-house IT platform.
TSB's Chief Financial Officer Ralph Coates confirmed the 153 million pound compensation from Sabadell was a provisional figure, adding: "It could reduce and it could similarly increase."
The problems led to a surge in accounts hit by fraud and forced the departure of TSB Chief Executive Paul Pester amid widespread criticism from British lawmakers of his handling of the crisis.
The bank will get a new chief executive this spring when Debbie Crosbie joins from rival British challenger bank CYBG.
Pester had already dropped a 2 million pound bonus linked to completing the IT switchover, but is still in line to receive 800,000 pounds of severance pay this year, Meddings confirmed.
Meddings said 2018 had been "the most challenging year of TSB's history", but he was confident the firm would turn a corner this year.
Despite the high profile IT problems TSB gained 140,000 customers during the year, more than offsetting the 80,000 that it lost.
TSB's total deposits fell 4.7 percent to 29.1 billion pounds, while customer lending was 30 billion pounds.
Sabadell said that without the exceptional TSB costs its results were in line with expectations, making a net profit of 568 million euros, down from 678.5 million euros.
Sabadell reported a fully-loaded CET1 ratio - a core measure of bank resilience - of 11.3 percent. TSB's capital ratio stood at 19.5 percent.
(Additional reporting By Axel Bugge in Lisbon; Editing by Paul Day/Keith Weir)
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