TSB plans 82 branch closures in £100m cost cutting exercise
TSB is planning to close 82 branches and cut 400 jobs in a restructuring project that will see the bank look to save around £100 million.
There are around 540 TSB branches in the UK, and the bank claims that it has more than double the average for branches per 10,000 customers (1.6 vs 0.8).
Part of the restructure will involve a £120 million investment into digital technology. TSB is looking to reduce the account opening process from seven days to ten minutes, and aims for 90% of its transactions to be self-service by 2020.
Announcing the new strategy, TSB’s CEO Debbie Crosbie says: “With a trusted brand, modern platform, and national presence, TSB is well placed to deliver – but we need to make changes to enable us to compete.
“The plan we’re sharing today involves some difficult decisions, but it sets TSB up to succeed in the future. Taken together, these changes will help us to serve more customers, better, for the long-term.”
On a media conference call about the new strategy, Crosbie revealed that the bank spends around 85% of its income on keeping the lights on, compared to around 64% for competitors.
TSB was created in 2013 under the auspices of the European Commission after Lloyds Banking Group was bailed out by UK taxpayers during the financial crisis in 2008.
The bank originally had 631 branches, including Cheltenham & Gloucester subsidiary locations and Lloyds branches in Scotland.
TSB was floated by Lloyds and then bought by now-parent company Sabadell in 2015. The new owners attempted a major core banking replacement in 2018, switching TSB from its legacy Lloyds system to a purpose-built platform, Proteo4UK.
The migration was a massive undertaking – five million customers and their 1.3 billion records were moved. The bank called has since called it “the most complex change programme TSB has ever carried out and one of the most complex in British banking history.”
Beset with problems, the system switch caused a week of major disruption for customers, as well as £107 million in estimated losses and the resignation of then-CEO Paul Pester.
On the same media conference call, Crosbie did not rule out that Sabadell might decide to sell TSB following its turbulent IT problems, but added that she had been given “extensive support” by the group.
The bank was hit by payment problems just days after a Slaughter and May report into the 2018 IT failures, and in the middle of the announcement of its new strategy.