Scandal-hit bank TSB must sack its boss Paul Pester before he causes serious damage to trust in banking, say senior MPs.
The chief executive was slammed for being secretive and failing to set out the scale of the problems faced by TSB’s customers after an IT meltdown left 1.9million people unable to access their accounts.
Nicky Morgan, chairman of the Treasury Select Committee, said the banker had lost the confidence of her group and should not remain in his post.
Paul Pester (pictured) was slammed for failing to set out the scale of the problems faced by TSB’s customers after an IT meltdown left 1.9million unable to access their accounts
In a letter to the lender’s chairman Richard Meddings she said: ‘The committee considers that the TSB board should give serious consideration as to whether Mr 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.’
The letter – which was copied to regulators at the Financial Conduct Authority (FCA) and the Bank of England – is the most serious challenge so far to Mr Pester’s position.
He has faced repeated criticism over a disastrous move to a new IT system that left customers struggling to access their money. It led to long queues at TSB branches, which suffered IT problems of their own, and the bank’s call centre being overwhelmed by thousands of concerned savers trying to find out what was going on.
Criminals quickly realised there was a golden opportunity to con customers and put the bank under sustained assault. In some cases customers were left on hold for up to nine hours by TSB’s fraud team, while their life savings were taken away – with 1,300 victims so far.
Nicky Morgan (pictured) said the banker had lost the confidence of her group and should not remain in his post
MPs were angered by what they saw as Mr Pester’s complacency during two meetings with the committee. There was also rare public criticism from the FCA, which accused him of putting an over-optimistic spin on the situation.
Mrs Morgan said: ‘The committee has sought to shed light on the discrepancies between the bank’s public statements about its service level and the experience of its customers.
‘Its work has been hindered by Dr Pester’s evidence, which has fallen short of the standards of openness and transparency we expect. Whether intentionally or not, he has not been straight with the committee, and more importantly TSB’s customers, about the severity of the problems.’
During his second appearance before the committee this week, MPs rounded on Mr Pester, with Labour’s John Mann asking him if he planned to resign. The bank boss said he is waiting for a report by law firm Slaughter and May before taking action against those responsible.
He replied: ‘I don’t think anyone else would be as committed as me to fixing these problems.
‘But when we get to the end of this situation with the independent report, then of course we will take whatever action is necessary.’
TSB’s board responded to the criticism last night by backing Mr Pester. In a letter to Mrs Morgan, Mr Meddings said the bank had made ‘good progress’ in resolving the IT ‘issues’ and added: ‘The important point is that this progress has been achieved under the leadership of Paul Pester, who continues to have the full support of the board.’