Continued compensation claims drive up costs
Banking giant RBS has added another £50m to the cost of dealing with June’s IT failure, which left customers without access to their accounts for up to two weeks.
The group had previously set aside £125m to deal with the fallout, such as compensation claims and fixing the issue itself. Now, in its most recent financial results, it admitted another £50m has been added to the bill, bringing the total cost up to £175m. The new charge has been attributed to its subsidiary, Ulster Bank.
The group admitted that it still needs to work to regain "customer confidence" following the incident.
The group’s financial results also suggested that the technology incident had hit other parts of the group. "In Q3 2012, gross new lending increased 3% compared with Q2, which was impacted by relationship managers efforts being diverted from lending due to the Group technology incident," the financial statement said.
The IT disaster struck in June of 2012, when batch processing software, provided by CA, went wrong. It meant accounts could not be updated and direct debit payments failed. The company blamed human error for the breakdown.