Paul Pester, chief executive of TSB Bank, has stepped down after seven years following a series of IT failures that left thousands of customers without access to their accounts.
In April, 1.9 million TSB customers were locked out of its online service and banking app after an attempt to migrate customers to a new computer system was unsuccessful.
Customers faced further disruption on Monday following problems at the weekend that left them unable to access their accounts.
The bank says: "Although there is more to do to achieve full stability for customers, the bank’s IT systems and services are much improved since the IT migration.”
It adds: “Paul and the board have therefore agreed that this is the right time to appoint a new CEO for TSB.”
Dr Pester says: “The last few months have been challenging for everyone at TSB. However, I want to thank all my colleagues across TSB for their dedication and commitment during this period and for their focus on putting things right for TSB customers.”
He adds: "It has been a privilege to lead TSB through its creation and first five years. I look forward to seeing the next stage of our bank’s history evolve."
TSB chairman Richard Meddings will take on the role of executive chairman with immediate effect until a successor is found.
Watchdog and committee interventions
The Financial Conduct Authority launched an investigation into TSB’s IT problems in June.
The regulator said it was unhappy with TSB’s communications with its customers, adding that there were concerns the bank was not being “open and transparent about the issues experienced”.
Dr Pester came under pressure from MPs on the Treasury Select Committee to quit in June.
Nicky Morgan MP, chair of the Treasury Committee, said she was “deeply concerned” by TSB’s poor communications and the scale of the its problems.
Now, Ms Morgan says on the resignation of the TSB boss: “Since the IT problems at TSB began, Paul Pester set the tone for TSB’s complacent and misleading public communications. The Treasury Committee, therefore, concluded that it lost confidence in Dr Pester’s position as chief executive of TSB.
“In this light, it is right that he is stepping down.
“But the committee remains concerned about the continuing problems at TSB, including unacceptable delays in compensating customers who have been badly let down. It is to be hoped that Dr Pester’s successor is able to restore the confidence of the bank’s long-suffering customers.”
TSB said in July that the repair bill for the IT meltdown had reached £176 million, although the final cost is likely to be much higher once all the complaints are resolved.
This pushed the bank into a first half loss of £107.4 million, down from a profit of £108 million for the same period last year.