Paul Pester, the chief executive of TSB, had three main tasks to perform at Wednesday’s Treasury select committee hearing. First, apologise with maximum contrition for the IT shambles and the hassle caused to customers. Second, declare that he definitely won’t be getting any form of bonus this year. Third, say when the problem will be fixed. He failed on all three fronts.
The formal apologies flowed (every chief executive knows the drill) but they were undercut by Pester’s combative assertions that much of TSB’s new IT system is working splendidly. The “underlying engine” is doing its job, he argued, but there were still “accessibility” issues – a bit like a shop being too small for all the customers who want to get in, he suggested. Since he was the executive ultimately responsible for commissioning the size of the shop, this explanation fell flat. When 40,000 customers have complained in 10 days, accessibility is the problem.
TSB chief Paul Pester to forfeit £2m bonus in wake of IT meltdown
The bonus issue should have been an open goal since even Pester, surely, can’t be expecting to collect more than his £900,000 basic salary this year. But, no, the TSB chairman, Richard Meddings, said Pester had agreed not to take any bonus “for this integration”, which left open the possibility that he could receive awards for other supposed achievements. This may not be a comfort to those overworked TSB staff struggling to handle the volume of complaints, or the complainants left hanging on the phone lines.
As for when TSB will get control of the situation, nobody would offer a hostage to fortune. Once Pester had conceded there is still a problem that needs to be fixed, he wouldn’t set a date – although he inevitably wanted to lever in a reference to “improvements” arriving all the time. Only Miquel Montes, appearing for TSB’s Spanish parent, Banco Sabadell, agreed with a reference to “days” – but it sounded a long way from being a guarantee.
Meddings, at least, seemed to grasp the grasp the seriousness of the TSB’s situation (perhaps because he saw a few crises during his executive days at Standard Chartered) but whether the postmortem by the law firm Slaughter and May will get to the heart of events is anybody’s guess. The true state of relations between TSB and its Spanish parent, and how much blame should fall on each party, is a crucial issue that was barely explored in the session.
Instead, the lasting impression was of prickly Pester hitting a series of wrong notes. By the end, he was on to his favourite subject of how TSB will rise as a mighty challenger to the “big five” banks who enjoy too many privileges. Nicky Morgan, chair of the committee, had to remind him that, if you really want to challenge, start by running a reliable and robust operation. Quite.
Bookmakers have little to moan about
Damned bookmakers, they’re never happy. Their marketing departments never miss an opportunity to make exaggerated claims about being cleaned out when too many heavily backed favourites romp home at Cheltenham. Now they’re moaning about too many favourites losing – or, more specifically, Arsenal failing so often.
A “sustained period of bookmaker-friendly results”, says Paddy Power Betfair, contributed to a soft first quarter. When Arsène Wenger’s heavily backed team got into the losing habit away from home, punters went into hibernation, apparently. There was “an adverse recycling impact”, meaning fewer people had winnings to blow on the next match.
From the point of view of the bookmaker, this does not sound like the worst problem to have. The customers were still separated from their money, just more quickly than usual. Paddy Power, note, reckons it has still enough spare cash to spend £500m on buying back its own shares. It will live.
Let it go, Mike
Sports Direct is out of the headlines but the founder and chief executive, Mike Ashley, seems determined to get it back in. He’s grumbling about Iain Wright, the former chair of the business select committee that investigated working conditions at Sports Direct. Let it go, Mike: the inquiry happened two years ago, and if you didn’t want MPs turning up unannounced at your Shirebrook warehouse, you shouldn’t have said that they were “100%” free to do so. Wright isn’t even an MP these days, making Ashley’s stance doubly bizarre.