Yahoo Finance Lloyds Bank's profits leap as it distances itself from TSB's IT meltdown
Britain’s biggest high street bank Lloyds has posted a 23pc leap in quarterly profits and distanced itself from the ongoing IT meltdown at its former subsidiary TSB.
The lender posted pre-tax profits of £1.6bn for the first three months of the year, up from £1.3bn the prior year.
Chief executive Antonio Horta-Osorio said the bank was benefiting from a “resilient” UK economy and had started a£1bn share buyback to return cash to investors during the period.
George Culmer, the bank’s chief financial officer, said that from Lloyds’ perspective the migration of 1.3 billion customer records from their IT system to TSB’s over the weekend was “successfully completed”.
TSB customers have been suffering ongoing outages to vital banking services since last Friday, when TSB began transferring from Lloyds’ platform to its own. TSB was spun out from Lloyds in 2013 but had continued to rent its IT system.
“We successfully completed the migration over the weekend and that was explicitly acknowledged by them,” said Mr Culmer.
“There’s nothing we can do to help resolve the situation, that’s up to them.”
Lloyds took an additional £90m charge for meeting payment protection insurance (PPI) claims, but said this was down to an FCA ruling requiring banks to write to previously defended cases rather than a spike in volume of claims.
Mr Culmer insisted Lloyds remained “very committed” to its branch network, despite announcing another 49 closures alongside 1,200 redundancies earlier this month.
“I envisage branches will remain a core part of the provision,” he said.
Mr Culmer also provided an update on plans to find a new manager for £109bn of assets formerly managed by Standard Life Aberdeen - and hinted it had been barred from the contest this time round.
Lloyds dealt a major blow to the newly merged Standard Life Aberdeen in February when it dumped its contract with the asset manager as it was upset it had become a clear rival to its Scottish Widows business in the pensions market.
Mr Culmer said: “We’ve had an enormous amount of interest and entered round two with a more select group of bidders.
“We have not allowed anyone into the next round of the process with whom we have a conflict of interest.”
