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MPs gun for under-fire TSB chief after IT fiasco

Paul Pester, the under-fire chief of crisis-hit bank TSB, is facing an unprecedented attempt by MPs to oust him, after the Treasury committee wrote to the bank’s board demanding it reconsider his position as “a matter of urgency”.
Nicky Morgan, chair of the powerful Treasury committee, wrote to the lender’s chairman Richard Meddings to argue the board should "give serious consideration as to whether his position is sustainable".
This evening business leaders had already begun questioning whether the MPs had overstepped the mark in intervening in the leadership of a private company.
In his response, Mr Meddings said Mr Pester “continues to have the full support of the TSB board.” He said the bank had made “good progress” in resolving its IT problems but recognised it had more to do.
Around a million customers were not able to access online and mobile banking services for weeks after a bungled TSB IT system switch in April.
MPs gun for under-fire TSB chief after IT fiasco

Around a million TSB customers were unable to access online and mobile banking services for weeks following a bungled IT system switch

Credit:
Peter Macdiarmid/Getty Images
Yesterday Mr Pester put in another widely-criticised performance in front of the committee, in which he revealed the full extent of the bank's IT meltdown, with 1,300 customers losing money through fraud attacks, while 370 people were wrongly told they had died.
Ms Morgan wrote: "The committee has lost confidence in [Mr Pester’s] 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. I ask that the board consider the committee’s view as a matter of urgency.”
The former education secretary also accused Mr Pester of repeated “dissembling” in his two appearances in front of the committee and in correspondence.
Ms Morgan wrote to City regulators at the Financial Conduct Authority (FCA) and the Bank of England informing them of the committee's verdict.
MPs gun for under-fire TSB chief after IT fiasco

Treasury committee chair Nicky Morgan

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John Nguyen/JNVisuals
A source close to the committee described it as an "unprecedented" step for it to write to the chairman of the board of a bank to question their position.
Business leaders questioned the move. Edwin Morgan, director of policy at the Institute of Directors, said: "The Treasury Committee has a vital role to play in holding our financial institutions to account, but ultimately a chief executive serves at the pleasure of the board and shareholders, not politicians.”
A spokesman for TSB’s parent company Sabadell said Paul Pester’s position was “a matter for the board of TSB”, adding: “Our only interest is to fix the issues for customers as soon as possible.”
The Telegraph understands regulators at the Bank were surprised by the strength of the intervention.
Another regulator said it fit a pattern of the Treasury committee taking increasingly aggressive action towards business leaders, having played a big role in senior Bank official Charlotte Hogg having to leave over failing to declare her brother worked for Barclays.
A spokesman for the Prudential Regulation Authority said: “The Bank of England was in agreement with the stance taken in [FCA chief executive] Andrew Bailey’s letter this week.”
The FCA has begun an investigation into TSB's IT failings, which could lead to unlimited fines against the bank and bosses being banned from working in finance.
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