Partner Article

RBS to pay £125m following computer meltdown

RBS will pay out £125m in costs to customers affected by June’s technical glitch, which left many without access to their accounts and unable to pay bills.

The bank revealed the costs as it reported a half-year loss of £1.5bn, compared with £794m a year earlier.

A further £50m provision will be made for interest rate swap mis-selling, as well as £135m to cover the cost of mis-selling PPI.

RBS noted that staff costs were 4% lower than in the same period last year, as the Group has shed 5,700 staff, principally in Markets and International Banking.

Group chief executive, Stephen Hester, said: “We are in a chastening period for the banking industry. The consequences of the sector’s past over-expansion are still being accounted for, probably with some way still to go.

“The mistakes and vulnerabilities carried over from that period are both financial and cultural. The consequences of these mistakes have seen the reputation of the sector fall to new lows.

“This is dangerous because customer trust is a prerequisite for a successful banking sector and an effective banking sector is so important to economic stability and growth. It especially saddens me because since rejoining the sector three and a half years ago to lead the change and recovery at RBS, I have been struck by the sterling efforts of the vast majority of people in our bank to provide honest, reliable and helpful services to customers.”

This was posted in Bdaily's Members' News section by Tom Keighley .