April 26, 2018 / 7:33 AM / a month ago

UPDATE 1-UK's TSB Bank calls in IBM to fix IT problems

* Q1 profit before tax down 39.3 pct

* Disruption from system migration

* Migration aimed at reducing IT costs (Adds more detail, results details)

By Estelle Shirbon and Emma Rumney

LONDON, April 26 (Reuters) - Britain’s TSB Bank has called in International Business Machines Corp to help resolve an IT crisis that has left dozens of customers without access to digital services for almost a week, its CEO said on Thursday.

Disruption scheduled to end on Sunday rolled on until Thursday morning, with customers still reporting issues via social media.

CEO Paul Pester said he would take direct control of the bank’s IT platform to fix the severe problems which stemmed from a planned migration of computer systems onto a new platform over the weekend.

“I will take direct control from 8 o’clock (0700 GMT) this morning for our platform, I’ve drafted in a team of global experts from IBM,” Pester said during an interview on BBC Radio 4.

“They are reporting to me, directly to me and I will take control of the platform until it gets fixed. I am putting things right.”

Pester also said the bank’s customers would not be charged any overdraft fees for the month of April.

“I’m very aware that many customers may have used their overdraft in April more than they would have expected to. There will be no overdraft fees or any overdraft charges for any of our customers through April,” he said.

The bank had been running on an IT system effectively rented from former parent Lloyds Banking Group, costing TSB hundreds of millions of pounds a year since its takeover by Spain’s Banco Sabadell in 2015.

TSB on Thursday reported a 2.3 percent rise in first-quarter operating costs to 207.5 million pounds ($289.32 million), primarily due to an increase in these fees.

Profit before tax fell 39.3 percent to 19.3 million pounds, which it said was due to temporary movements in hedging arrangements.

$1 = 0.7172 pounds Reporting by Estelle Shirbon; editing by Kate Holton and Jason Neely

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