TSB bank said in its annual report that it will resume paying bonuses after it reported an annual profit in the year following its catastrophic IT meltdown that contributed to a loss before tax of £105.4 million in 2018.
TSB, currently owned by Spain’s Banco Sabadell, said in the report: “TSB’s statutory profit before tax for 2019 was £46.0 million (including a £39.6 million increase in expected warranty recoveries under the migration and IT service contracts) compared to a loss before tax of £105.4 million in 2018.
“The result in 2018 was significantly affected by the costs to deliver the IT migration and the costs of the subsequent post migration service disruption.
“Consequently, the Remuneration Committee determined that no TSB Award or SPA would be made in respect of 2018 performance.
“However, an individual cash award of £1,500 was made to all employees, except members of the Executive Committee, in December 2018, reflecting the team effort across the business to put things right for customers.
“The TSB Board commissioned a number of internal and independent reviews into the IT migration to the new platform, including from Slaughter and May, and await the findings from a joint FCA and the PRA investigation.
“As a result of overall business performance in 2019, the Remuneration Committee has approved a 2019 TSB Award pool of 8.64% of basic salaries (£17.7 million), meaning that all TSB employees up to and including those in senior manager roles, who have an ‘On Track’ performance rating, will receive 8.64% of their basic salary as a TSB Award.
“For more senior employees, from heads of department to Executive Committee members, the Remuneration Committee, after applying a 2.5% ex ante risk adjustment to the bonus pool, approved a 2019 TSB Award and New Award pool of £7.6 million (equivalent to 83.9% of the on target award level) …”